FULL YEAR RESULTS PRESENTATION - British Land/media/Files/B/British-Land-V2/downlo… · FULL YEAR RESULTS PRESENTATION FULL YEAR ENDED 31 MARCH 2011. Chief Executive CHRIS GRIGG

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FULL YEAR RESULTSPRESENTATIONFULL YEAR ENDED 31 MARCH 2011

Chief Executive

CHRIS GRIGG

Delivering Superior Total Returns

3

Total Accounting Returns of 17.7%

Total Accounting Return

Net Asset Value +12.5% to 567p 12.5%

Dividend of 26p 5.2%

Total Return 17.7%


4

Unlevered Total Returns Outperformed IPD by 180 bps

IPD British Land BL vs IPD

Capital Return 4.9% 7.3% +240 bps

Total Property Return 11.3% 13.1% +180 bps

1. Sustainable and growing income

2. Assets which protect and grow capital value

3. Creating incremental value

4. Controlling costs

5. Exploiting our scale and financial strength


5

Focus on Five Key Priorities

Income: Significant Rental Value Outperformance

6

260 bps Outperformance Relative to IPD

Source: IPD

99%

100%

101%

102%

103%

Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11

IPD

British Land

British Land ERV Movement vs. IPDERV growth (March 2010 = 100)

Income: Benefiting from Polarisation in Retail

7

British Land Retail ERV Movement vs. All Retail IPDERV growth (March 2010 = 100)

99%

100%

101%

102%

Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11

British Land

IPD

Outperforming IPD Rental Value by 130 bps

Source: IPD

Income: Benefiting from focus on London Offices

8

100%

102%

104%

106%

108%

Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11

British Land

IPD

Outperforming IPD all Office Rental Value Growth by 560 bps

Source: IPD

British Land Office ERV Movement vs. All Office IPDERV growth (March 2010 = 100)

Income: Growing Through Leasing Activity

9

Leasing Activity adds £14.2m to Annual Gross Rental Income

Retail

Occupancy 98.5%

New Lettings 707,000 sq ft

New Lettings vs ERV +1.8%

Total Activity 3,241,000 sq ft

Increasein Rent £5.8m

Offices

97.8%

270,000 sq ft

+11.6%

889,000 sq ft

£8.4m

Income: Adding New Space

10

Retail Acquisitions London Developments

Drake Circus 5, Broadgate

Green Lanes The Leadenhall Building

Mayflower Retail Park 199 Bishopsgate

2 Sainsbury’s Superstores NEQ, Regent’s Place

Baker Street

Marble Arch House

Rent: £23 million per annum ERV: £71 million per annum

Over £90m of Incremental Rent Roll

0%

2%

4%

6%

8%

Q1 Q2 Q3 Q4 Last 12 mths

British Land

IPD

Capital: Significant Capital Value Outperformance

11

FY+240 bps

Outperformed IPD Capital Returns by 240 bps

British Land Capital Returns vs. IPDCapital Return

Source: IPD

Capital: Creating Outperformance at Regent’s Place

12

£52m

£117m

£37m

£28m

Asset Management Yield Compression Development Net Valuation Uplift

44%

32%

24% 100%

Three Sources of Valuation Uplift

Creating Incremental Value: Development

• 2.2m sq ft committed London development

• Aon: significant pre-let

• Rent ahead of investment case

• Expected profit has risen significantly on whole programme

13

Expected Profit per Share Much Higher

Cost Control: A Competitive Advantage

14

Net Operating Costs 13.5% of Gross Rental Income

0%

5%

10%

15%

20%

25%

30%

British Land UK Peer Average

Operating Cost Competitiveness% of gross income (2010/11)

• Modern portfolio

• Effective outsourcing

• Efficient head office

Benefits of Scale and Financial Strength

• Access to wide range of financing markets

• £1.1 billion of secured and unsecured refinancing over last eighteen months

– £560 million unsecured bank facility

– Over £300 million in German Pfandbrief market

• Ability to commit quickly to substantial developments and high return opportunities

15


Chief Executive

CHRIS GRIGG

GRAHAM ROBERTSFinance Director

Financial Returns

18

Total Accounting Return of 17.7%

Year to 31st March 2010 2011

REIT Income Return 28.4p 28.5p

REIT Capital Return 104.6p 60.5p

REIT Total Return 133.0p 89.0p

Dividend 26.0p 26.0p

Net Asset Value 504p 567p

Growth in Underlying Profit

Reconciliation of Underlying Profit Before Tax

19

£249m £256m

£(16)m

£(17)m +£5m

+£24m+£4m +£7m

2011 Net Investments add £14m to Annual Profits

FY 2010 Credit provision

2010 net divestment

2011 netinvestment

Lettings & reviews (net)

Surrenderpremiums

Net finance costs

FY 2011

Annualised Gross Rental Income

20

Office Occupancy Increased from 93% to 98%

Year to 31 March 2010 £m 2011 £m

Retail 335 343 +2.3%

Offices & Other 142 140 -1.2%

Total (like for like) 477 483 +1.4%

Disposals 7 -

Acquisitions - 25

Development 40 38

Total 524 546 +4.2%

Improvement in Net Operating Costs Ratio

21

• Benefits of full occupancy

• Scale economies across all sectors

• Well developed outsourcing model and small head office

• Asset selection favouring low maintenance and landlord costs

High Pass-Through of Income a Source of Competitive Advantage

Year to 31 March 2011 £m

Property Outgoings 23

Admin Expenses 68

Fees & Other Income (18)

Net Operating Costs 73

Gross Rental Income 541

2011 Costs as % of Gross Rent 13.5%

2010 Costs as % of Gross Rent 14.6%

Key Drivers of Valuation

22

Summary Valuation Performance

MovementLFL NEY Yield Compression

EPRA top-up Initial Yield ERV Growth

FY to 31 Mar 2011 FY FY FY FY

Retail 5.3% (31) bps 5.6% 0.7%

Offices 10.6% (18) bps 6.1% 7.7%

Total 6.9% (29) bps 5.8% 2.7%

Developments +21.8% Having Achieved Key Milestones

Office Development Profits Illustration

23

• Committed developments contributed 7p per share to 2010/11 NAV growth

• At March 2011 20p per share (5.6% yield and £56 psf) unrealised profit

• With 10% ERV growth and 5.0% yield c. 50p unrealised profit

Profitable Development to Generate Superior Growth

Development Profits

0p

10p

20p

30p

40p

50p

60p

March 2011 With Growth("illustrative")

Profit to come

Profit to date

EPRA Net Initial Yields

24

£81m of Contracted Cash Flow Growth

Year to 31 March 2011 £m Yield

Annualised Net Rent (EPRA basis) 504 5.2%

Topped-up Annualised Net Rents 564 5.8%

Total Topped-up Annualised Net Rents 585 6.1%

Excludes Committed Developments at ERV of £80m

Further Growth in Net Asset Value

25

Reconciliation of Net Asset Value

504p567p

+34p+31p

+28p(26)p (4)p

Mar 10 Retail revaluation

Office & Other revaluation

Underlying profits

Dividends Other Mar 11

12.5% Increase in Net Asset Value per Share

Strengthened Balance Sheet

26

Improving Interest Cover and Loan to Value Ratio

Year to 31 March 2011 2010 £m 2011 £m

Property & Investments 8,705 9,623

Net debt 4,210 4,411

Interest cover 2.0x 2.2x

Average interest rate 5.2% 4.9%

LTV 47% 45%

Flexibility of Financing

27

• Group debt includes £1bn of debentures and USPPs with maturity of over 5 years

• Group unsecured credit rating upgraded to A-

• 70% of JVs & Funds debt investment rated bonds (of which two thirds AAA rated)

£4.4bn from Diversified Sources and with Spread Maturities

Group Debt Maturity & Development Spend

Group Refinancing

28

£0.0bn

£0.2bn

£0.4bn

£0.6bn

£0.8bn

£1.0bnDevelopment spend

Maturities

FY

• £450m of drawn debt matures in the next 3 years

• £740m development spend

• Post YE, new £560m facility

• Facilities lasting over 3 years increased to £1.5bn

New Facility Adds to Financial Flexibility and Capacity

2012 2013 2014 2015 2016

£0.0bn

£0.5bn

£1.0bn

£1.5bn

JVs & Funds Refinancing

29

Gross

BL Share

• £570m (BL Share) debt maturing within 2 years

• HUT securitisation matures in H2 2012, comprising AAA rated bonds

JVs & Funds Debt Maturity Profile

£560m (Gross) Debt Refinanced in the Last 18 Months

FY2012 2013 2014 2015 2016

Summary

• Growth in REIT Income Return achieved through recent development lettings

• Total accounting return of 17.7% for the year to 31 March 2011

• Dividend maintained at 26.0 pence representing a 5.2% income return

• Net Asset Value per share increase of 12.5% to 567 pence

• Net operating costs ratio improved to 13.5%

• £1.1 billion of refinancing strengthening balance sheet and extending funding

30

Chief Investment Officer

STEVE SMITH

2010/11 – Portfolio Priorities

1. Retain focus on prime destination retail and London offices

2. Significantly increase exposure to London offices through development

3. Build long-term exposure to West End offices

4. Selectively acquire assets where we see value

32

Superior Total Property Returns

2010/11 Investment Activity

• £1.6bn development programme

• Invested nearly £500m - mainly retail

• Sold assets at 8% ahead of book value

33

Investment Activity (£m)

FY to 31 Mar 2011 Gross Value BL Share Income

Committed Developments 1,603 1,050 71

Acquisitions (excl. developments) 464 427 25

Disposals (285) (242) (5)

Net Investment 1,782 1,235 91

Adding Significantly to Future Income

Increasing Exposure to Offices

34

• Total office weighting increases to 37%

• West End offices increases to 15%

Improving The Portfolio Balance

At 31st March (proforma for committed developments at completed value)

Proforma Portfolio Weighting by Value (%)2011 Proforma

Continued Portfolio Outperformance

• ERV outperformance driven by focus on high quality locations

• BL yields compressed less than the overall market

35

Sector Allocation Driving Outperformance

British Land Returns vs IPD

Y/E 31 March BL IPD

Income Returns 5.5% 6.1%

Capital Return 7.3% 4.9% + 240 bps

- ERV Growth 2.7% 0.1%

- Yield Compression 29 bps 44 bps

Total Returns 13.1% 11.3% + 180 bps

Benefiting from Prime Retail Portfolio

36

Turning Point for Prime Retail Rents

All Retail ERV Growth (IPD)March 2007 = 100

Prime

Secondary

80

85

90

95

100

105

Mar 07 Mar 08 Mar 09 Mar 10 Mar 11

Retail Vacancy Ratios (IPD)At 31 March 2011

Benefiting from Prime Retail Portfolio

37

Vacancy Rates High in Many Secondary Locations

0%

2%

4%

6%

8%

10%

12%

14%

Shopping Centres Retail Warehouses All Retail

Prime

Secondary

1. Location

Focus on Stock Selection and Asset Management

38

Outperformance Deliverable in Fewer Locations

2. Rents

3. Unit configuration

4. Flexibility

5. Environment

• Locally dominant and accessible

• Affordable rents• Where retailers can trade profitably

• The right type of space

• Can be adapted to changing retailer needs

• Where consumers want to shop

Retail Lettings since 30 Sept 2010

Competition for the Best Space

39

Competition Driving Rental Growth

Sq ft ‘000s % above ERVUnder Offer

Sq ft ‘000s

Retail warehouses 152 +9.3 346

Shopping Centres 140 +4.4 58

Superstores 10 +8.7 -

High Street 14 - -

Total 316 +6.8 404

Teesside Shopping Park – Stockton-on-Tees

Teesside Shopping ParkStockton-on-Tees

Rental Values Up 3.5% Year on Year40

Parkgate Shopping Park - Rotherham

41

Lettings 13% Ahead of Rental Value

Parkgate Shopping ParkRotherham

Continued Demand for High Quality Locations

42

Y/E 31 March BL Letting Sq ft ‘000s BL ERV vs IPD

South East/East 142 +210 bps

South West/Wales 30 +100 bps

Midlands 52 +270 bps

York & Humberside 223 +170 bps

North West 74 +170 bps

North East 10 +280 bps

Scotland 153 +90 bps

Strong Relative Performance around the Regions

Acquisitions - Drake Circus

• Above average unit sizes

• Attractive for shoppers

• Comfortably affordable (£160 psf Zone A)

• Limited local competition

43

Driving Income Growth and Capital Value

Acquisitions: Barnstaple

• Locally dominant

• Attractive environment

• Highly affordable (£55 psf Zone A)

• Initial yield of over 8% pa

44


City and West End Office Rents£ psf

Offices: Supply/Demand Driving Rental Growth

45

0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015

City West End

Source: Drivers Jonas Deloitte (historic) and Average Agents' Consensus (forecast)

0.0

2.0

4.0

6.0

8.0

10.0

1985 1990 1995 2000 2005 2010 2015

Speculative Completed


London – Development Pipelinem sq ft

Source: Drivers Jonas

Strong Demand for our High Quality Buildings

46

• 1.2m sq ft of lettings/lease extensions during the year

• 13% Grade A lettings Central London; 25% City lettings

Major Office Lettings

Year to 31 March Sq ft ‘000s BL Rent £m % above ERV

5 Broadgate (pre-let) 700 19.1 -

20 Triton Street 142 7.2 14.6

Ropemaker 43 1.9 14.4

201 Bishopsgate 39 0.8 2.2

338 Euston Road 15 0.5 6.2

Broadgate Tower 12 0.3 11.1

155 Bishopsgate 8 0.2 9.6

13% Share of Grade A Lettings in London

Offices: A Well Balanced Investment Portfolio

47

Office Investment Portfolio

At 31 March 2011

% of investment

portfolioTopped-

up NIY %Capital

Value £psfLease

Length yrs

Long-term Income (over 10 years) 58 5.8 718 12.5

Medium-term Income (5 – 10 years) 24 6.1 684 7.2

Short-term Income (under 5 years) 18 7.7 507 3.7

Total 100 6.1 646 9.4

Long Term Performance and Low Volatility

Creating Incremental Value: Residential Development

• Alongside office developments

– NEQ

– Baker St

– Marble Arch House

• 314,000 sq ft of residential

• £200m end value

• £89m of pre-sales to date

48

£200m Committed to London Residential

Creating Incremental Value: Retail Development

• 302,000 sq ft redevelopment

• Nearly 40% pre-commitments

• 220,000 sq ft of extensions

• 55% pre-commitments

49

1.1m Sq Ft Retail Development Pipeline

Whiteley Village Glasgow Fort

Puerto Venecia, Zaragoza

50

2.3m Sq Ft Regional Shopping Centre

Outlook

• Retail polarising into a two tier market

• Clear inflection point for prime retail rents

• Continued strength in Central London offices

• Increased investment market activity

• More opportunistic activity

51

Our Portfolio Remains Well Positioned

Chief Executive

CHRIS GRIGG

Outlook

• Optimistic about prospects for British Land

• Continued rental value growth in both Offices and Retail

• Incremental value through development

• Opportunities for acquisitions

53

2010/11: A Year of Gathering Momentum

• Well established management team

• New talent below board level

• Clear direction of travel

54

1. Sustainable and growing income

2. Assets which protect and grow capital value

3. Creating incremental value

4. Controlling costs

5. Exploiting our scale and financial strength


55

APPENDICES

REIT Income Return

57


Net Rental Income 545 518

Net Interest Costs (246) (212)

Net Rental Income less Interest 299 306

Fees & Other Income 15 18

Admin Expenses (65) (68)

Underlying Profit Before Tax 249 256

Taxation (5) (5)

REIT Income Return 244 251

Reconciliation of Underlying Profit Before Tax

58


IFRS Profit/(Loss) before tax 1,128 830

Net valuation movement (includes disposals) (908) (591)

Deferred and current taxation of joint ventures & funds 5 6

Amortisation of intangible asset 15 10

Other non-recurring items 9 1

Underlying profit before tax 249 256

Gross (Accounting) Rental Income – Sectoral Analysis

59

1 Including surrender premiums and back rents

Gross Rental Income (£m pa) 12 months to 31 Mar 2011 Annualised as at 31 Mar 2011

Group Funds & JVs Total Group Funds & JVs Total

Retail Warehouses 101 40 141 106 44 150

Superstores 10 62 72 8 62 70

Shopping Centres 19 65 84 33 60 93

Department Stores 33 - 33 34 - 34

UK Retail 163 167 330 181 166 347

Europe - 25 25 - 24 24

All Retail 163 192 355 181 190 371

City Offices 23 87 110 22 80 102

West End Offices 54 - 54 55 - 55

All Offices 77 87 164 77 80 157

Other 18 - 18 18 - 18

Total – recurring items 258 279 537 276 270 546

– non-recurring items1 4 - 4

Total 262 279 541

EPRA Balance Sheet (Proportional Consolidation)

60

£m GroupFunds& JVs

March 2011

March 2010

Total properties 4,783 4,789 9,572 8,539

Net debt (1,687) (2,630) (4,317) (4,081)

Other net liabilities (129) (25) (154) (51)

EPRA Net Assets 2,967 2,134 5,101 4,407

EPRA Diluted NAV per share 567p 504p

Loan to value ratio – Group 24% 25%

Loan to value ratio – inc. share of Funds & JVs 45% 47%

Reconciliation of EPRA NAV & NNNAV

61

2010 £m

2010 Pence

2011£m

2011 Pence

Balance sheet (IFRS) net assets 4,208 481 4,930 548

Deferred tax arising on revaluation movements 43 5 37 4

Mark to market on effective cash flow hedges and related debt adjustments

126 15 89 10

Adjust to fully diluted on exercise of share options 30 3 45 5

EPRA NAV 4,407 504 5,101 567

Deferred tax arising on revaluation movements (43) (5) (37) (4)

Mark to market of debt and derivatives 156 18 53 6

EPRA NNNAV 4,520 517 5,117 569

Net Debt

62

As at 31 March 2011 Group £m Funds & JVs £m Total £m

Gross debt 1,939 2,792 4,731

Market value of derivatives 38 74 112

Cash & liquid investments (263) (169) (432)

EPRA adjustments1 (27) (67) (94)

Net debt (EPRA basis) 1,687 2,630 4,317

Average interest rate 4.7% 4.9%

Interest cover2 3.0 2.2

1 Excludes mark to market on effective cash flow hedges and related debt adjustments2 Underlying profit before interest and tax (UPBIT)/net interest

Top 10 Properties

63

As at 31 March 2011

Excluding developmentssq ft’

000 BL Share % Rent £m pa1

Occupancyrate %2

Lease length, yrs3

1 Broadgate, EC2 4,436 50 172 96.5 8.2

2 Regents Place, NW1 1,210 100 48 98.3 9.2

3 Meadowhall Shopping Centre 1,376 50 82 98.2 10.5

4 Ropemaker Place, EC2 594 100 26 99.3 15.6

5 Drake Circus Shopping Centre 560 100 15 98.5 7.7

6 Teesside Retail Park, Stockton 460 100 14 100.0 9.7

7 Debenhams, Oxford Street 367 100 16 100.0 28.0

8 York House, W1 132 100 5 100.0 6.5

9 Forster Square Retail Park, Bradford 246 100 7 100.0 10.1

10 St Stephen’s, Hull 410 100 8 98.4 9.6

1Annualised contracted rent including 100% of Funds and Joint Ventures2Including accommodation subject to asset management and under offer

Top 10 Retail & Office Customers

64

Retail

% of total rent

Tesco 7.4

Sainsbury 6.4

Debenhams 4.3

Homebase 2.3

Kingfisher (B&Q) 2.2

Next plc (inc. Next at Home) 2.0

Alliance Boots 1.3

Asda Group (inc. Asda Living) 1.1

Currys 1.1

Marks & Spencer 1.1

Office

% of total rent

UBS 3.8

HM Government 2.2

Bank of Tokyo-Mitsubishi UFJ 1.7

Macquarie Group 1.6

Herbert Smith 1.5

RBS 1.3

Aegis 0.9

JP Morgan 0.9

Reed Smith 0.9

Gazprom 0.8

Portfolio Valuation by Sector

65

Group Funds & JVs Total Portfolio Change2

As at 31 March 2011 £m £m1 £m % 12 mths %2 3 mths %2

Retail Warehouses 1,837 800 2,637 27.6 4.9 2.6

Superstores 140 1,195 1,335 13.9 4.6 0.4

Shopping Centres 501 1,004 1,505 15.7 7.2 0.3

Department Stores 457 - 457 4.8 4.7 2.8

UK Retail 2,935 2,999 5,934 62.0 5.4 1.5

Europe - 361 361 3.8 3.0 1.0

All Retail3 2,935 3,360 6,295 65.8 5.3 1.5

City 466 1,409 1,875 19.6 8.9 2.4

West End 1,176 - 1,176 12.3 13.7 4.0

Provincial 18 8 26 0.2 2.2 0.3

All Offices4 1,660 1,417 3,077 32.1 10.6 3.0

Other 188 12 200 2.1 2.9 1.3

Total 4,783 4,789 9,572 100.0 6.9 2.0

1 Group’s share of properties in Joint Ventures & Funds2 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 sales3 Including developments of £46 million4 Including developments of £306 million, up 21.8% in the 12 months and 3 months

Yield Profile

66

Excluding developments (%)

EPRA Net Initial

Yield1

EPRA Topped-up

Net Initial

Yield1,2

Overall Topped-

up Net Initial

Yield1,3

Net

Reversionary

Yield1

Net Equivalent

Yield1

Retail Warehouses 5.5 5.8 5.8 5.7 5.7

Superstores 5.0 5.0 5.0 5.0 5.1

Shopping Centres 5.4 5.7 5.7 6.0 5.9

Department Stores 5.7 5.7 8.7 4.6 6.5

UK Retail 5.4 5.6 5.8 5.5 5.7

Europe 7.1 7.1 7.1 7.4 7.6

All Retail 5.5 5.6 5.9 5.6 5.8

City 4.7 6.4 6.4 6.0 5.8

West End 3.9 5.6 6.0 6.1 5.6

All Offices 4.4 6.1 6.2 6.1 5.7

Other 8.4 8.4 10.4 6.0 9.5

Total 5.2 5.8 6.1 5.8 5.8

1 Including notional purchasers’ costs 2 Including rent contracted from expiration of rent free periods and fixed uplifts3 Including fixed/minimum uplifts (excluded from EPRA definition)

Lease Length & Occupancy

67

Excluding Developments Average Lease Length (yrs) Occupancy Rate (%)

To Expiry To First Break Underlying1 Overall

Retail Warehouses 11.3 10.4 98.7 98.5

Superstores 16.8 16.8 100.0 100.0

Shopping Centres 10.6 9.9 97.0 95.6

Department Stores 29.5 26.0 99.1 98.6

UK Retail 13.7 12.8 98.5 98.0

Europe 9.4 3.9 90.5 90.5

All Retail 13.3 12.1 97.9 97.5

City 11.9 9.9 97.2 97.0

West End 11.2 8.7 98.7 98.1

All Offices 11.7 9.4 97.8 97.4

Other 21.4 21.3 91.8 91.8

Total 13.0 11.5 97.8 97.3

1Including accommodation subject to asset management and under offer

Annualised Rents and Average Rent £psf

68

Excluding Developments Annualised Rents (£m pa)1 Average Rent (£psf)

Group JVs & Funds Total Contracted2 ERV3

Retail Warehouses 109 44 153 22 23

Superstores 8 63 71 21 21

Shopping Centres 33 59 92 26 27

Department Stores 28 - 28 12 10

UK Retail 178 166 344 21 22

Europe - 24 24 10 11

All Retail 178 190 368 20 20

City 3 82 85 47 43

West End 44 - 44 42 43

All Offices 47 82 129 45 43

Other 14 1 15 18 13

Total 239 273 512 24 241 Gross (cash) rent receivable plus any increases to current ERV from outstanding rent reviews (net of ground rents payable) 2 Average contracted passing rent (post expiry of rent free periods)3 Current average headline ERV (as determined by external valuers)

Contracted Rental Increases (Cash Flow Basis)

69

Year to 31 March(£m pa)Excluding developments 2012 2013 2014 2015 2016 2012-14 2012-16

Expiry of rent free periods 11 8 28 - - 47 47

Guaranteed fixed & minimum rental uplifts 2 3 3 3 4 8 15

Total 13 11 31 3 4 55 62

Rent Subject to Open Market Rent Review

70


Retail Warehouses 21 27 23 22 20 71 113

Superstores 5 4 9 17 20 18 55

Shopping Centres 17 15 11 7 18 43 68

Department Stores - - - - 5 - 5

UK Retail 43 46 43 46 63 132 241

Europe - - - - - - -

All Retail 43 46 43 46 63 132 241

City 6 17 29 31 17 52 100

West End 5 8 2 2 14 15 31

All Offices 11 25 31 33 31 67 131

Other - - - - 1 - 1

Total 54 71 74 79 95 199 373

Potential uplift at current ERV 2 2 1 3 3 5 11

Rent Subject to Lease Break or Expiry

71


Retail Warehouses 2 4 6 4 8 12 24

Superstores - - - - - - -

Shopping Centres 4 3 6 4 8 13 25

Department Stores 1 - - - - 1 1

UK Retail 7 7 12 8 16 26 50

Europe 3 4 3 4 3 10 17

All Retail 10 11 15 12 19 36 67

City - - 2 9 11 2 22

West End 1 7 1 2 4 9 15

All Offices 1 7 3 11 15 11 37

Other 1 - 1 - - 2 2

Total 12 18 19 23 34 49 106

% of Contracted Rent 1.9 3.2 3.3 3.9 6.0 8.4 18.3

Committed Developments

72

As at 31 March 2011 sq ft

‘000 PC Value £m

Cost to

Complete

£m1

Notional

Interest

£m1 ERV £m2 Pre-let £m4 Sales £m3

5 Broadgate4 700 Q3 14 75 162 32 19.1 19.1 -

The Leadenhall Building4 610 Q3 14 51 163 27 18.4 - -

NEQ, Regent’s Place 500 Q2 13 78 211 24 18.4 - 104

199 Bishopsgate4 142 Q3 12 24 17 4 3.5 - -

Baker Street 158 Q1 13 54 61 9 8.0 - 17

Marble Arch House 86 Q2 13 - 54 4 3.7 - 11

Total Offices 2,196 282 668 100 71.1 19.1 132

Puerto Venecia, Zaragoza 1,359 2012 34 62 4 8.4 3.2 -

Superstore extensions 73 2011/12 - 10 - 0.6 0.6 -

Total Retail 1,432 316 740 104 80.1 22.9 132

1 To PC (based on notional cost of finance of 6%)2 Estimated headline ERV net of rent payable under head leases (excluding tenant incentives)3 Parts of development expected to be sold, no rent allocated4 Heads of Terms agreed for a 191,000 sq ft pre let to Aon Limited with an option to lease a further 85,000 sq ft

Prospective Developments

73

As at 31 March 2011 BL Share % sq ft ‘000

Whiteley Village, Fareham 50 302 Detailed planning consent

Glasgow Fort 39 175 Detailed planning consent

Glasgow Fort (leisure) 39 45 Detailed planning consent

Fort Kinnaird, Edinburgh 19 133 Detailed planning consent

Surrey Quays Shopping Centre 50 103 Planning pending

Broughton Park, Chester 39 58 Planning pending

Power Court, Luton 100 100-200 Planning pending

Superstore extensions 50 103 Planning pending

Kingston Centre, Milton Keynes 50 21 Detailed planning consent

6-9 Eldon Street 100 33 Pre submission

Colmore Row 100 280 Detailed planning consent

Meadowhall Metropolitan 100 2,200 Outline planning

New Century Park 50 1,000 Outline planning

Estimated Future Development Spend

74

£0m

£100m

£200m

£300m

2012 2013 2014 2015 2016

Retail

Offices

Costs to complete(excluding land and notional interest)

FY

£m Offices Retail Total

Current value1 282 34 316

Cost to complete2 668 72 740

Notional interest2 100 4 104

Total 1,050 110 1,160

1As at 31 March 20112To PC (based on notional cost of finance of 6%)

£236m

£16m£42m

£184m

£262m

Illustrative Unrealised Development Profits

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Unrealised profit illustration1 Average Valuation Yield

(pence per share) 5.6% 5.25% 5.00% 4.75% 4.50%

Estimated Rental Value2

(5)% 15 23 29 36 44

£56 psf 20 27 34 41 49

+5% 24 32 39 46 54

+10% 28 36 43 51 60

+15% 32 41 48 56 65

+20% 37 46 53 61 71

1 Estimated remaining valuation surpluses on committed office developments, based on external valuers’ March 2011 assumptions (sensitised for movements in yields and headline rents) excluding valuation surplus of 7 pence realised to date

2 Headline (excluding tenant incentives)

Disclaimer

76

The information contained in this presentation has been extracted largely from the Full Year Results Announcement for the year ended 31 March 2011.

This presentation may contain certain “forward-looking” statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of British Land speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. British Land does not undertake to update forward-looking statements to reflect any changes in British Land’s expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

This presentation is made only to investment professionals as defined in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ('the FP Order'). The content of this presentation has not been approved by a person authorised under the Financial Services and Markets Act 2000 (“FSMA”). Accordingly, this presentation may only be communicated in the UK with the benefit of an exemption set out in the FP Order. An investment professional includes:

(i) a person who is authorised or exempt under FSMA; and

(ii) a person who invests, or can reasonably be expected to invest, on a professional basis for the purposes of a business carried on by him; and

(iii) a government, local authority (whether in the United Kingdom or elsewhere) or an international organisation; and

(iv) any director, officer, executive or employee of any such person when acting in that capacity.

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The distribution of this presentation in jurisdictions other than the UK may be restricted by law 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. This presentation has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this presentation had been prepared in accordance with the laws of jurisdictions outside the UK.

All opinions expressed in this presentation are subject to change without notice and may differ from opinions expressed elsewhere.

Documents

FULL YEAR RESULTS PRESENTATION - British Land/media/Files/B/British-Land-V2/downlo… · FULL YEAR RESULTS PRESENTATION FULL YEAR ENDED 31 MARCH 2011. Chief Executive CHRIS GRIGG