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InvestorPresentationHY 2020
1
Our distinctive business model &
clear strategy
Increasing our focus on mixed use places
Growing London campuses and
Residential and refining Retail
The scale and quality of our
portfolio
22.5m sq ft of high quality assets
Underpinned by our resilient balance sheet and financial strength
A well-positioned development
pipeline
Development pipeline aligned to strategy
Provides visibility on future earnings
Our operational expertise &
customer insight
Expertise in managing and leasing our assets based on our customer insight
Drives incremental value for stakeholders
Our Investment Case
1 2 3 4
2
British Land at a glance
Plymouth
£15.4bnAssets under management
£11.7bnOf which we own
£521mAnnualised rent
22.5m sq ftFloor space
97% Occupancy Canada Water
As at September 2019
1FA, Broadgate
3
£11.7bn(BL share)
Solus Retail (5%)
London Campuses (45%)
Residential & Canada Water (4%)
Multi-let Retail (26%)
Standalone offices (10%)
Retail – London & SE (10%)
72%London & South East
A diverse, high quality portfolio
4
Our unique London campuses
78%
£8.6bnAssets under management
£6.4bnOf which we own
£205mAnnualised rent
6.6m sq ftFloor space
97% Occupancy As at September 2019
5
Canada Water53 acre mixed use opportunity in Central London
6
Why mixed use?
Flexible AffordableAttractive to skilled employees
Well connected
Aligned to their brand
Tech enabled
Close to complementary
businesses
Occupierswant space which is…
Well connected Safe and promotes wellbeing
Located in vibrant neighbourhoods
Sustainable and eco friendly
Close to retail, leisure and
dining options
Supported by excellent facilities
and services
Has a range of workspace including collaborative
and quiet
Employeeswant space which is…
World class, sustainable and smart buildings Attractive, vibrant and safe public space+
7
We have created a distinctive advantage in mixed use
• Mixed use campus development – 1 Broadgate, 2-3 Finsbury Avenue, 5 Kingdom
Street near & medium term – 1.3m sq ft committed developments – Further opportunities Norton Folgate, Ealing,
Kingston, Woolwich, Canada Water
• Scale– Control of groundscape eg. Eataly, Exchange Park
• Operational platform – Expertise across development, planning,
marketing, data and tech, sustainability – Combined asset management team with
dedicated retail and offices function
• Natural partner for complex schemes – SWFs, property specialists, Government
Broadgate
8
De-risked development pipeline focused on campuses
1 Finsbury Avenue 287,000 sq ftPC’d Q1 2019
Recently Completed & Committed Developments
1 Broadgate532,000 sq ft
135 Bishopsgate335,000 sq ft
Completion Q1 2020
Near term pipeline Medium term pipeline excl. Canada Water
Norton Folgate335,000 sq ft
• ERV of £63m• 87% pre-let or under offer
• ERV of £48m• All schemes consented
1 Triton Square366,000 sq ft
Completion Q4 2020
Aldgate Place, Phase 2
146,000 sq ft
Medium term pipeline excl. Canada Water
Gateway Building105,000 sq ft
2-3 FinsburyAvenue
563,000 sq ft
5 Kingdom Street429,000 sq ft
Meadowhall Leisure333,000 sq ft
Eden Walk, Kingston 533,000 sq ft
100 Liverpool Street 520,000 sq ft
Completion Q1 2020
9
De-risked developments providing future income
Pence per share
0.00.51.01.52.02.53.03.54.04.55.0
FY20 FY21 FY22 FY23
Committed figures include 1 Finsbury Avenue which recently completed
4.6p annual EPS accretion once committed developments fully let
£m ERV
0
10
20
30
40
50
60
70
Committed Near term
Pre-let or under offer
87%Pre-let or under offer
across committed schemes
To let
10
Current Locations
New & Forthcoming Locations
Storey roll out
10
11
Building out Storey
Leasing and Asset Management
Finance and Legal
Development
HR and Other Support Services
Group Technology
Proposition & Operating Model
Landlord Services
Select and plan space
Fit out and Furnish
Channel and pricing strategy
Marketing & leasing
Technology
Account management
Storey and FM services
Customer onboarding
Personalisation
Technology installation
• Operational Stats
• c.30% premium to traditional lettings
• Stabilised portfolio 81% let or under offer
• 24 months average lease length
• Good progress since 2017 launch• 297,000 sq ft operational• Open on all 3 campuses• Further 91,700 sq ft identified
How British Land supports Storey’s operating platform
12
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 population
Annual footfall of
302m
Average rent to sales ratio
9%
Occupancy cost ratio
14%
13
Retail sales focused on assets that do not meet our criteria
Rental growth potential
The right characteristics to drive income from rents and commercialisation
Development potential
Potential to grow and/or reconfigure the asset to meet future requirements
Mixed-use potential
Potential to create a true mixed-use community including retail, leisure, office and residential uses
Fulfilment potential
Potential to become a last-mile fulfilment hub, considering potential to develop and quality of local infrastructure
Population trends
Large population in catchment, with growth potential
Quality of demographics
The right number of the right type of demographic groups
Economic health
Above average income and employment levels in the catchment
CompetitionQuantum of retail space in the local area; strong competitive position relative to potential competitors
Critical MassRight size scheme – large enough for draw, but small enough to drive demand:supply tension
14
7.3m sq ftMedium term pipeline
opportunities
Located at mixed use assets: - 2-3 Finsbury Avenue, 5 Kingdom Street,
Gateway Building, Ealing, Eden Walk- £260m book value- £6m current rent roll- c.£80m potential ERV - 3 out of 5 schemes already consented
Standalone:- Meadowhall Leisure- Flexibility over progression options- Consented scheme
Canada Water- Resolution to grant outline planning received
September 2019 - £347m book value- £8m current rent roll
Significant medium-term opportunities
15
Building a London focused, increasingly mixed use business
March 2010 Current Indicative business split 5+ years
66% 41% 30-35%
Retail Campus-focused Offices
Storey Residential
33% 55%5%
10%
50-55%
• London focused: over 70% of group
• Smaller, more focused Retail
• Meaningful Residential exposure
• Right balance of flexible and core workspace
16
Key messages from HY results
Good progress on strategy
- Resolution to grant planning at Canada Water
- £236m retail sales
Managing capital well
- £125m buyback completed
- Well positioned with debt low
Pipeline of attractive opportunities
- 1m sq ft near term pipeline including Norton Folgate and 1 Broadgate
- 7.3m sq ft medium term pipeline, principally Canada Water
1 2
3 4
Continued operational resilience
- 1.3m sq ft leasing activity
- Portfolio 97% full
- Developments 87% pre let or under offer
17
Outlook
• Retail– Occupational market to remain challenging
– Investment market will be tough, but growing evidence that buyers returning to the market
• London – Optimistic that current momentum will
continue; function of supply as well as quality and location of our space
– Benefitting from our 7.3m sq ft medium term pipeline
– Investment market would benefit from greater macro stability
100 Liverpool Street, Broadgate
Half year results 6 months ended September ‘19
18
19
Results Overview
Underlying earningsper share
-6.4% vs H1 19
EPRA Net Asset Value per share
-5.4% vs March 19
Portfolio valuation
-4.3% vs March 19(Retail -10.7%, Offices +0.4%)
Loan to value
Incl: +120bps val’n declines,+110bps development spend
Committed developments let or under offer
120,000 sq ft lettings in period
Committed developments EPS accretion
Primarily FY21 & FY22
16.1p 856p £11.7bn
30.8% 87% 4.6p
20
Underlying earnings per share
17.216.1 16.1
(1.6)
0.5 (0.5)0.1
0.4
HY 2019 Net divestmentand
developments
Sharebuybacks
Excl. impact ofcapital activity
Retail like-for-like income
Offices like-for-like income
Financingactivities and
other
HY 2020
21
Net rental income
243 267
(20)
2 (5) 1 (2)
HY 2019 Sales Acquisitions Retail like-for-like income
Offices like-for-like income
Developments HY 2020
£m
1 Like for like rental growth is stated excluding the impact of surrender premia
Like for like -3.2%
Like for like +1.1%
1 1
22
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20
Admins - stores closing
CVAs - stores closing
CVAs - reduced rents
Annualised contracted rent impact by Quarter (£’m)
Two thirds of store closures since April 2017 are either re-let, under offer or in negotiation
12 mths: £8m12 mths: £14m
Incl. Debenhams
and Arcadia
CVAs & Admins
23
Income statement
6 months to 30 September H1 2019 H1 2020 Change %
Net rental income (£m) 267 243 (9.0%)
Fees & other income (£m) 6 7 16.7%
Administrative expenses (£m) (42) (41) (2.4%)
Net finance costs (£m) (62) (57) (8.1%)
Underlying Profit (£m) 169 152 (10.1%)
Underlying earnings per share (p) 17.2 16.1 (6.4%)
Dividend per share (p) 15.50 15.97 3.0%
24
Valuation performance
Valuation£m
Valuation movement
Yield movement
ERVmovement
Total 11,723 +17bps -2.3%
Offices 6,439 +0bps +0.9%
Retail 4,790 +37bps -4.8%
Residential 147
Canada Water 347 x
0.4%
(4.3%)
(10.7%)
(2.1%)
12.4%
25
Lower investment volumes recently; significant capital waiting on the sidelines pending further clarity on Brexit process
Occupational demand remains strong; prime rents at c.£70psf in the City and c.£110psf in the West End1
Continued strong leasing performance across newly developed and existing space
Developments£1.0bn (+4.9%)
Office valuation performance
Standing Portfolio£5.4bn (-0.4%)
+0.9% ERV growth
1 As published by Cushman & Wakefield
0bps yield shift
£125m spend in period
£48m valuation uplift
+0.4%Offices H1 valuation
movement
26
-
500
1,000
1,500
2,000
2,500
3,000
3,500
More than 0% 0% to -10% -10% to -20% More than -20%Local Multi-let Regional Multi-let Superstores Leisure Solus Department Stores
September ’19 Valuations (£’m)
% Valuation Movement in HY20
-10.7%Retail H1 valuation
movement
Retail Valuation Movements
Incl. Ealing Broadway, Kingston
Centre, Nugent Orpington
Incl. Meadowhall, Glasgow Fort,
Teesside Stockton, New Mersey Speke
Incl. Drake Circus Plymouth, Bath Southgate
Incl. Orbital Swindon, Beaumont Leicester
27
EPRA net asset value
905p856 856p
(55p)
16p (15p) 8p (1p)
March 19 Valuationperformance
UnderlyingProfit
Dividends Sharebuyback
Financingactivity
Other Sept 19
(2p)
28
Strength of debt metrics
Proportionally Consolidated 31 Mar 2019 30 Sept 2019
Loan to value (LTV) 28.1% 30.8%
Weighted Average Interest Rate 2.9% 2.7%
Interest Cover 3.8x 3.7x
Available Undrawn Facilities £1.5bn £1.4bn
Weighted Average Drawn Debt Maturity 8.1yrs 7.9yrs
Senior unsecured credit rating (Fitch) A A
Leasing & Asset ManagementHY20
29
30
High qualityReady to fit Fitted
Broad and flexible leasing offer
Developments
Existing Space
&
31
Leasing well on existing as well as new space
Monzo122,000 sq ft at Broadwalk House, Broadgate
338 Euston Road, Regent’s Place
New tech sector occupier 45,000 sq ft at 338 Euston Road, Regent’s Place
Broadwalk House, Broadgate
671,000 sq ft11.1% vs ERV
32
Storey
• Fully fitted, serviced and managed space– All inclusive basis
– Ability to brand own space
– Targets scale ups not start ups; average headcount c. 50
– British Land-owned buildings
• Evolving our offer– Storey Club – launched at Paddington Central
and planned for 100 Liverpool Street
– Standalone space – Orsman Road launching early 2020
• Good progress since launch– 297,000 sq ft operational; 91,700 sq ft identified
– Supporting broader leasing success Storey Club, Paddington
33
Smart & Sustainable offices
• Sustainability an important theme in leasing discussions – Occupiers focused on minimising carbon footprint– Reflects employee, customer and shareholder
pressure
• Our long term focus on Sustainability is an important advantage – 92% of developments BREEAM Excellent or
Very Good
• 1 Triton Square credentials – 35,600 tonnes of embodied carbon saved by
retaining the structure– BREEAM Outstanding
• Smart features can support Sustainability – Piloting technology to deliver a more efficient
working environment for an occupier 1 Triton Square
34
Retail leasing overview
Commercialisation & car park income• 70k sq ft• £0.8m headline rent • 3 years average lease length• 1 mth average incentive
+1%vs previous passing
rent1
Assets to be developed• 80k sq ft• £0.7m headline rent• 3 years average lease length• 7 mths average incentive
Rates mitigation• 95k sq ft• £0.2m headline rent• 9 mths average lease length
Temporary leasing• 130k sq ft• £2.2m headline rent• 20% below passing rent• 1 year average lease length• No incentive given
Long term leasing• 230k sq ft• £4.8m headline rent• 15% ahead of passing rent• 3.5% ahead of ERVs• 7.0 years average lease length• 6 mths average incentive
1 Excludes assets to be developed, rates mitigation and commercialisation & car park income
96%Retail occupancy
35
Operational outperformance in a challenging retail market
• 605,000 sq ft leasing activity– Leasing deals 1% ahead of previous passing rent1
– 3.5% ahead of ERV
• Pragmatic approach to leasing – Focused on maintaining occupancy
– Willing to accept lower rents or shorter leases
• Supported operational outperformance – Footfall down 0.1%, 440 bps ahead of benchmark
– LFL sales +0.5%, 420 bps ahead of benchmark
The Barcode, Plymouth
1 Excludes assets to be developed, rates mitigation and commercialisation & car park income
36
A commercial approach to support operational performance
Mayflower, Basildon • 20,500 sq ft Fabb Sofas returned
– Re-let to Lidl; maintaining full occupancy – 19% discount to previous rent – 25 year lease
• Opportunity to respond to customer needs– Convenience-led missions dominate with grocery
increasing
Giltbrook, Nottingham
Giltbrook, Nottingham • 30,000 sq ft Fabb Sofas returned
– 60,000 sq ft re-let to M&S; 30,000 sq ft added – 15% discount to previous rent
• Excellent fit with the M&S Store Transformation Plan– Large catchment c. 1m people – Family friendly mix, including leisure and F&B
• “Stores remain fundamental to how we serve customers”
Mayflower, Basildon
37
Major milestone achieved at Canada Water
• Resolution to grant outline planning from Southwark Council, covering:– 53 acre masterplan
– Detailed consent on the first three buildings, covering 576,000 sq ft
• Earliest start on site mid next year
• Next planning steps:– Completion of S106 agreement
– Formal issue of planning
– Headlease drawdown
Canada Water
38
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
39
First detailed plots
Plot A1 – residential & workspace
A2 – workspace & leisure
K1 – residential
40
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
41
2020 Sustainability Targets: FY19 performance
FY19 2020 Target
FutureproofingCapital efficiency
92% 100% developments on track to achieve BREEAM Excellent/Very Good 44% 55% improvement in energy efficiency vs 2009 baseline96% 100% of electricity to come from renewable sourcesAchieved: 64% 55% improvement in carbon efficiency vs 2009 baseline10% 15% reduction capital carbon emissions vs concept (embodied carbon)In progress Trial 3 visible interventions to improve local air quality0.4% to landfill Zero waste to landfill
Skills and opportunityExpert people
1,232 1,700 people supported into employment (cumulative)2.4% 3% of BL workforce and priority tier 1 and 2 suppliers to be apprentices 53% 100% strategic suppliers signed up to new code of conductIn progress Pilot a Living Wage Zone at a London campus100% / 66% 100% BL and supplier workforce at managed assets paid Living Wage
WellbeingCustomer orientation
On track Achieve WELL Certification on 100 Liverpool StreetIn progress 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
92% Fully implement Local Charter at staffed assets and major developments17% 20% employee skills-based volunteering81% 90% employee volunteering
42
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: scores pending
2018: A-
EPRA Sustainability Reporting Awards
2019: Gold for 8th year
MSCI ESG Ratings2019: AAA rating
Other benchmarks and awards
Appendices
43
44
British Land Footfall movement vs Benchmark1
% YoYBL Footfall Benchmark Outperformance (bps)
1 ShopperTrak UK National Index
3.2 0.0 0.3
-0.9-0.1
-1.4
-2.4-3.1 -3.2
-4.5FY16 FY17 FY18 FY19 H1 20
+460 +240 +340 +230 +440
Continuing to outperform on key operational metrics
45
British Land LfL sales movement vs Benchmark1
% YoYBL LfL Sales Benchmark Outperformance (bps)
1 BRC KPMG In-Store LFL Non-Food Index
+260 +220 +130 +160 +420
Continuing to outperform on key operational metrics
2.4 0.0
-1.6 -1.5
0.5-0.2
-2.2-2.9 -3.1
-3.7
FY16 FY17 FY18 FY19 H1 20
46
BL footfall performance vs benchmark
British Land
UK Market (ShopperTrak UK National Index)
Jan-10 = 100
75
80
85
90
95
100
105
110
115
Jan-11Jan-10 Jan-18Jan-12 Jan-19Jan-13Jul-12Jul-10 Jul-13 Jan-14 Jul-15Jan-15 Jul-16 Jul-18Jul-14 Jan-16Jul-11 Jan-17 Jul-17 Jul-19
BL Index
Tyco (formerly Experian) Inde
Outperformance for6m to Sep 2019
+440bps
47
Occupancy Cost Ratio
0%
5%
10%
15%
20%
BL UK Peers
Data updated to September 2019Occupancy cost ratio defined as the sum of total rent, service charge, rates, insurance as a proportion of retailer sales (net of VAT). Peers include Landsec, Hammerson and intu.Rent to sales ratio defined as total rent as a proportion of retailer sales (net of VAT). Peers include Landsec and Hammerson. Both metrics based on all stores, including MSUs and anchors.
Rent to Sales Ratio
0%
5%
10%
15%
BL UK Peers
Our portfolio is relatively affordable to our occupiers
48
TotalRetail sales
growth
Online penetration
PhysicalRetail salestrajectory
+ Shrinkage of floorspace = Sales per sq ft
growth
Long term drivers of trading densities 10yr view
49
Total Retail Sales growth (pa)
Online penetration
Implied long run physical sales growth (pa)
Optimistic
4.5%
50% 35%
Current
3.3%10yr historic
CAGR
19%
2.5%10yr historic
CAGR
-2% 2%
Pessimistic
2.5%3.3%
Historic growth
4.3%
CACI
2.6%
Euromonitor Passport
4.2%
Oxford Economics
35% 32%
Extrapolated Historic growth
CACI
Sources: ONS (historic), Euromonitor Passport (data to 2023), Oxford Economics (data to 2029), CACI (data to 2026). Figures all nominal and represent total retail sales (includes food and groceries, excludes fuel)
We expect online to absorb the majority of retail sales growth…
10yr view
50
Pessimistic Optimistic
Source: JLL (data to 2026). Figures all nominal and represent total retail sales (includes food and groceries, excludes fuel)
Implied long run physical sales growth (pa)
-2% 2%
Shrinkage of Floorspace (pa)
Industry sales per sq. ft growth (pa)
-2%
-1% +4%
-1%-1%
JLL store closures prediction
-1.5%
JLL floorspace decrease prediction
10yr view…however with shrinking floorspace, industry trading densities likely to grow
51
Industry sales per sq. ft growth (pa)
British Land historic LfLsales outperformance (pa)
-1% +4%
+190bpsFY16-FY19
outperformance
Pessimistic Optimistic
Implied British Land portfolio sales per sq. ft (pa) +1% +6%
…and we expect to continue to outperform 10yr view
52
Multi-let Retail assets
Southgate, Bath
Broughton, Chester1
Fort Kinnaird, Edinburgh1
Glasgow Fort1
St. Stephen’s, Hull
Eden Walk, Kingston
Drake Circus, Plymouth
Meadowhall, Sheffield
New Mersey, Speke1
Teesside, Stockton
Mayflower, Basildon Inverness1 Nugent, Orpington
Cornerhouse, Barrow The Woolwich Estate Botley Road, Oxford
Hindpool, Barrow Beaumont, Leicester Deepdale, Preston1
Woodfields, Bury Valentine, Lincoln1 Queens, Stafford1
Forster Square, Bradford Mostyn Champneys, Llandudno1 Orbital, Swindon
Tollgate, Colchester St. Peter’s, Mansfield Royal Victoria Place, Tunbridge Wells
Prospect Place, Dartford1 Kingston Centre, Milton Keynes Giltbrook, Nottingham
Crown Point, Denton Whiteley, Fareham Serpentine Green, Peterborough
Wheatley, Doncaster Ealing Broadway
Lion, Woking Crown Wharf, Walsall1
Old Market, Hereford Studlands, Newmarket
Harlech, Newport Elk Mill, Oldham
1 Assets held within Hercules Unit Trust or its subsidiaries and joint ventures
Regional LocalAttracting visitors from a wide catchment for a planned trip
Fitting into the daily life of local communities
53
Major retail property holdings
As at 30 September 2019 BL Share %
Sq ft000’s
Rent (100%)£m pa1,4
OccupancyRate %2,4
Lease Length yrs3,4
1 Meadowhall, Sheffield 50 1,500 85 97.4 5.2
2 Drake's Circus, Plymouth 100 1,082 19 96.0 5.6
3 Glasgow Fort 78 510 21 98.0 5.8
4 Ealing Broadway 100 540 15 92.7 4.3
5 Teesside, Stockton 100 569 16 94.6 4.3
6 Speke, New Mersey 68 502 14 92.8 6.1
7 Kingston Centre, Milton Keynes 100 380 9 99.7 6.4
8 Serpentine Green, Peterborough 100 337 9 99.4 7.3
9 St. Stephen’s, Hull 100 552 10 98.1 4.1
10 Fort Kinnaird, Edinburgh 39 560 18 94.1 5.3
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
54
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: 189k 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, 30k sqft to Workday
• 73k sq ft to be Storey space• Size: 287k sq ft• PC’d Q1 2019
135 Bishopsgate• 97% let or under offer• Pre-let 123k sq ft to TP ICAP,
148k sq ft to McCann, 44k sq ft to Eataly• Size: 335k sq ft• Completion: Q1 2020
1 Broadgate• Current size: 330k sq ft• Potential size: 532k 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: 520k sq ft• Completion: Q1 2020
83% of Broadgate committed developments pre-let or under offer
55
Paddington Central Campus
56
Regent’s Place Campus
57
Top 20 occupiers & occupier split by industry
As at 30 September 2019
% of Retail Rent
Tesco1 7.6 Next 4.8 Kingfisher 3.4Walgreens (Boots) 3.4 Sainsbury’s 3.1 Marks & Spencer 3.1 Debenhams 2.8Dixons Carphone 2.8 TJX (TK Maxx) 2.1 JD Sports 2.0 Arcadia 2.0 Sports Direct 1.9 New Look 1.9 Asda 1.7 Virgin 1.6 Homebase 1.5 Steinhoff 1.5 TGI Fridays 1.4 CK Hutchinson 1.3 H&M 1.3
Occupier Split by Industry (%)
1 Includes £3.4m at Surrey Quays Shopping Centre2 Debenhams reduces to 0% following vacancy of 10 Brock Street and Facebook increases to 9.9% once they assume occupancy in November 20193 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.
Professional &Corporate 11%
General Retail 15%
Fashion & Beauty 19%
Banks & Financial services 11%
Food / Leisure 10%
TMT 10%
Grocery & Convenience 7%
Home & DIY 6%
Other 11%
Retail Top Occupiers Offices Top OccupiersAs at 30 September 2019
% of Office
RentGovernment 6.9 Facebook2 4.9 Dentsu Aegis3 4.8Visa 4.4 Debenhams2 4.1 Herbert Smith Freehills 3.5 Gazprom 2.8Microsoft 2.5 Vodafone 2.2 Deutsche Bank 2.1 Reed Smith 1.9 Henderson 1.8 Mayer Brown 1.6 Mimecast 1.4 Aramco 1.3 Credit Agricole 1.3 Kingfisher 1.3 Misys 1.1 Capula 1.1 Accor 1.1
58
1986
Insolvency Act introduces CVAs
A history of CVAs
2009
JJB “Landlord” CVA• reduces lease payments but
leaves other creditors unaffected• discounts Landlord vote by 75%
3-4 Retailer “Landlord CVAs” per year
2013-2017 March 2018
CVAs which affect more than rent appear
Seek legal advice as more adverse terms
emerge
June 2018
House of Fraser
BL CVA cross business committee forms and determines strategy
July 2018September 2018
BL engages with insolvency practitioners
Red Flags launched via BPF
November 2018
BL and group of landlords launch legal challenge of
Regis CVA
February 2019
Technical structure of
Landlord Steering
Committee takes shape
On Arcadia, SteerCo of Landlords via Advisor got:• access to better financial
business information• concessions and 20% upside on
sale for all landlords
May 2019
Arcadia CVA
June 2019
Monsoon CVA
September 2019
Debenhams CVA challenged in CourtOutcome awaited
December 2019
Regis challenge in court
Key: Macro events BL actions
59
Capital Activity
Since 1 April 2019 Offices £m
Retail £m
Residential £m
Canada Water£m
Total £m
Purchases1 32 - 19 - 51
Sales2 - (236) (56) - (292)
Development Spend 125 8 - 5 138
Capital Spend 20 16 - - 36
Net Investment 177 (212) (37) 5 (67)
Gross Investment 177 260 75 5 517
On a proportionally consolidated basis including the Group’s share of joint ventures and funds1 Includes purchase of 6 Orsman Road, Haggerston for £32m which exchanged in period and completed post period end2 Includes Clarges residential sales of £56m, of which £6m exchanged prior to FY20 and completed in the period and £3m exchanged and completed post period end
60
(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
(£721m)
FY19
(£67m)
HY20
Gross investment activity since April 2017
£4.0bn
61
Clarges Residential Unit Sales
Number of units £m
Completed in FY18 2 24
Completed in FY19 23 335
Completed in HY201 5 56
Total Completed 30 415
Exchanged 2 25
Total Sold 32 440
Units under offer 1 6
Units remaining 1 4
Total 34 450
1 Of which 1 unit (£3m) exchanged in the period and completed post period end
62
PurchasesSince 1 April 2019 Sector Price
(100%)£m
Price (BL Share)
£m
Annual Passing Rent
£m1
Completed
Aldgate Place, Phase 2 Residential 19 19 -
6 Orsman Road, Haggerston2 Offices 32 32 -
Total 51 51 -
1 BL share of annualised rent topped up for rent frees2 Exchanged in period and completed post period end
63
Sales
1 BL share of annualised rent topped up for rent frees2 £6m of which exchanged prior to HY20 and completed in the period and £3m of which exchanged and completed post period end
Since 1 April 2019 Sector Price (100%)
£m
Price (BL Share)
£m
Annual Passing Rent
£m1
Completed
Portfolio of Sainsbury’s stores Retail 429 194 12
David Lloyd Croydon Retail 22 22 1
Clarges2 Residential 56 56 -
Exchanged
Homebase Walton on Thames Retail 20 20 1
Total 527 292 14
64
H2 FY20 income statement guidanceGross Rents• Annualised accounting gross rent of £522m
as at 30 September 2019• This incorporates the reduction to contracted rents as
a result of CVAs and administrations prior to 30th
September 2019• Retail % like for like movement, absent any material
tenant events, is expected to be at a similar level for FY20 as the first half
• In Offices, rental income will primarily be driven by like-for-like growth across the portfolio, including the ramp up of our Storey offering
Operating costs• As we become more operational and expand Storey,
we expect our property operational costs to increase marginally but stay in line with H1 as a percentage of gross rents
• Administrative costs expected to be broadly in line with H1 level
Financing• Weighted average interest rate now 2.7%
on gross debt of £3.9bn• Undrawn facilities of £1.4bn, with commitment
fees of c.30bps p.a.
Dividend • As announced in May 2019, the dividend for the year
ending 31 March 2020 is 31.93p per share (quarterly dividend of 7.9825p per share)
•Other• Capital activity has the potential to significantly impact
profits. For example, selling/acquiring £100m of assets would reduce/increase profits by c.£3.4m and LTV by c.0.6%. This is based on an average portfolio topped up NIY of 4.8% and marginal cost of debt of 1.4%
65
Illustrative future income profile breakdown (cash basis)For the year to 31 March 2020 2021 2022 2023 2024 Total Accounting
Basis As at 30 September 2019 £m £m £m £m £m £mCurrent Passing Rent 521
529Contracted uplifts4 20 22 3 - 1 46Letting of Committed Developments1 26 22 - - - 48 39Contracted rent 615 568Sales exchanged post year end (1) - - - - (1) -Letting of completed developments 3 - - - - 3 3Lease Expiries – Development pipeline (1) (4) (1) - (1) (7) (7)Letting of Committed Developments1 – speculative 5 2 - - - 7 6Letting of Near Term Developments1 - - - 29 19 48 41RPI Linked Leases2 1 1 1 1 1 5 5Reversion3 4 5 7 1 (3) 14 12Vacancies 26 26 22
710 650Letting of Medium Term Developments (excl. Canada Water & Eden Walk) 81 66
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
66
Gross rental income1
Accounting Basis £m 6 months to 30 September 2019 Annualised as at 30 September 2019
Group JVs & Funds Total Group JVs & Funds Total
West End 75 - 75 140 - 140
City 7 34 41 12 63 75
Offices 82 34 116 152 63 215Regional 32 45 77 58 85 143
Local 44 12 56 89 22 111
Multi-let 76 57 133 147 107 254Department Stores and Leisure 8 - 8 21 - 21
Superstores 3 3 6 5 3 8
Solus and Other 6 - 6 12 - 12
Retail 93 60 153 185 110 295Residential2 2 - 2 4 - 4 Canada Water 4 - 4 8 - 8 Total 181 94 275 349 173 522
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
67
Administrative expenses6 months to 30 September 2018
£m2019
£m
Personnel costs 28 26
Share scheme costs (1) (1)
Other administrative expenses 18 19
Total 45 44
Capitalised costs (3) (3)
Total administrative expenses 42 41
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.
68
Operating costs metric6 months to 30 September 2018
£m2019
£m
Property operating expenses 24 32
Administrative expenses 42 41
Net fees and other income (6) (7)
Ground rent costs and operating expenses de facto included in rents (4) (8)
EPRA Costs (including direct vacancy costs) 56 58
Gross rental income 291 275
Ground rent costs and operating expenses de facto included in rents (4) (8)
Gross Rental Income (EPRA basis) 287 267
EPRA Cost Ratio (including direct vacancy costs) 19.5% 21.7%
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.
69
Number of shares As at 31 Mar 2019
(m)30 Sept 2019
(m)
IFRS Basic
Weighted average1 971 941
IFRS Diluted
Weighted average2 971 941
Underlying/EPRA diluted
Weighted average3 974 944
Year/Period end4 956 933
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.
70
EPRA balance sheet31 March 19 Group JVs & Funds 30 September 19
Total properties (£m) 12,316 8,434 3,289 11,723
Adjusted net debt (£m) (3,521) (2,794) (891) (3,685)
Other net liabilities (£m) (146) (2) (52) (54)
EPRA Net Assets (£m) 8,649 5,638 2,346 7,984
Loan to value (LTV)1 28.1% 30.8%
Weighted average interest rate 2.9% 2.7%
Interest cover 3.8x 3.7x
Weighted average maturity of drawn debt (years) 8.1 7.9
1 Group LTV based on Group Properties and net investment in Joint ventures & Funds, and Group net debt.
71
Reconciliation of EPRA NAV & NNNAV31 March 19 30 September 19
£m Pence £m pence
IFRS Net Assets 8,689 916 7,971 860
Deferred tax arising on revaluation movements 5 6
Mark to market on derivatives and related debt adjustments 113 137
Adjust to fully diluted on exercise of share options 24 19
Surplus on trading properties 29 19
Non-controlling interests (211) (168)
EPRA NAV 8,649 905 7,984 856
Deferred tax arising on revaluation movements (11) (9)
Mark to market of debt and derivatives (477) (563)
EPRA NNNAV 8,161 854 7,412 794
72
Gross and net debt reconciliationAs at 30 September 2019 Group
£mJVs & Funds
£mLess non-
controllinginterests
£m
Total£m
Gross Debt (principal) (3,039) (1,021) 120 (3,940)
IFRS adjustments:Issue costs and premia 12 2 (1) 13Fair value hedge adjustments (220) - - (220)Other items 4 - - 4IFRS gross debt (3,243) (1,019) 119 (4,143)Market value of derivatives 58 (10) 1 49Cash 160 128 (16) 272IFRS net debt (3,025) (901) 104 (3,822)
Adjustments:Remove market value of derivatives (47)Remove fair value hedges 188Other adjustments (4)Adjusted net debt (3,685)
73
Loan to value (LTV)As at
31 March 2019
£m
Valuation movement
Acquisitions Capital spend
Disposals Sharebuyback
Other As at 30 September
2019£m
Total properties 12,316 (531) 19 182 (263) - - 11,723
Other investments 151 5 - - - - 14 170
LTV assets 12,467 (526) 19 182 (263) - 14 11,893
Adjusted net debt 3,521 - 21 185 (259) 125 92 3,685
Other (19) - - - - - 2 (17)
LTV liabilities 3,502 - 21 185 (259) 125 94 3,668
LTV 28.1% 1.2% 0.1% 1.1% (1.5%) 1.0% 0.8% 30.8%
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.
74
Debt metricsProportionally Consolidated 31 Mar 2019 30 Sept 2019
Loan to value (LTV) 28.1% 30.8%
Weighted average interest rate 2.9% 2.7%
Interest cover 3.8x 3.7x
Weighted average maturity of drawn debt 8.1yrs 7.9yrs
Group 31 Mar 2019 30 Sept 2019
Loan to value (LTV) 22.2% 25.4%
Available undrawn facilities £1.5bn £1.4bn
Weighted average interest rate 2.2% 2.1%
Interest cover 4.9x 4.6x
Senior unsecured credit rating (Fitch) A A
75
-
200
400
600
800
1,000
1,200
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Debt maturity (£m)£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.
76
Debt financing – diverse profile
• Issued £100m 2034 USPP floating rate note– Follows repayment of a 5.5% £98m 2027 note– Extends BL debt maturity / improves profits
• Extended £810m of committed bank facilities by a further 1 year.
• No requirement to refinance until late 2022
• LTV increased by 270bps to 30.8%– Valuation declines +120bps– Development spend +110bps
• Weighted average interest rate new low of 2.7%
• Weighted average drawn debt term maturity 7.9 years
• Long term ratings affirmed and Short term Issuer Default Rating upgraded to ‘F1’ (Fitch Sep-19)
£3.9bn Drawn Debt1 (30 September 2019)
1 Proportionally consolidated. HUT’s debt shown at our share (£0.4bn) within JV & Funds.
£0.4bn
£0.8bn
£0.4bn
£0.3bn£0.6bn
£1.0bn
£0.4bn Bank RCFs Drawn US Private PlacementsConvertible Bond Sterling Bond Debenture & loan notesJVs SecuritisationsJV & Funds LoansUnsecured Secured
77
Portfolio valuation by sectorAs at 30 September 2019 Group JVs & Funds Total H1 Change %1
£m £m £m % £m
West End 4,066 - 4,066 (0.1) (4)
City 256 2,117 2373 1.3 30
Offices 4,322 2,117 6,439 0.4 26Regional 649 1,536 2,185 (13.2) (334)Local 1,673 322 1,995 (11.1) (250)Multi-let 2,322 1,858 4,180 (12.3) (584)Department Stores and Leisure 301 - 301 (0.1) -Superstores 84 50 134 (1.5) (5)Solus and Other 175 - 175 (5.4) (10)Retail 2,882 1,908 4,790 (10.7) (599)Residential2 147 - 147 (2.1) (3)Canada Water 347 - 347 12.4 38Total 7,698 4,025 11,723 (4.3) (538)Standing Investments 6,993 3,514 10,507 (5.2) (591)Developments 705 511 1,216 4.6 53
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
78
Valuation movement – Offices
6 months to 30 September 2019 Valuation £m
Change £m
Change%1
Yield movementbps2
ERV movement%2
West End 4,066 (4) (0.1) 2 (0.2)
City 2,373 30 1.3 (3) 2.9
Offices 6,439 26 0.4 - 0.9
Campuses represent 82% 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
79
6 months to 30 September 2019 Valuation £m
Change £m
Change%1
Yield movementbps2
ERV movement%2
Regional 2,185 (334) (13.2) +41 (5.5)
Local 1,995 (250) (11.1) +39 (4.7)
Multi-let 4,180 (584) (12.3) +40 (5.1)
Other 610 (15) (1.8) +14 0.0
Retail 4,790 (599) (10.7) +37 (4.8)
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
Multi-let assets represent 87% of the Retail portfolio
Valuation movement – Retail
80
Retail Portfolio Valuation – previous classificationAs at 30 September 2019 Group JVs & Funds Total H1 Change1
£m £m £m % £m
Shopping parks 1,384 899 2,283 (12.4) (322)
Shopping centres 927 942 1,869 (11.8) (250)
Superstores 84 50 134 (1.5) (5)
Department stores 62 - 62 (10.5) (7)
High Street 153 1 154 (9.7) (17)
Leisure 272 16 288 0.8 2
Retail & Leisure 2,882 1,908 4,790 (10.7) (599)
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 sales
81
Portfolio net yields1,2
As at 30 September 2019 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 3.7 4.1 4.1 4.3 2 4.8 (0.2)City 3.4 4.0 4.0 4.7 (3) 5.5 2.9Offices 3.6 4.0 4.0 4.4 - 5.0 0.9Regional 5.3 5.5 5.6 5.7 41 5.8 (5.5)Local 5.9 6.1 6.2 6.3 39 6.1 (4.7)Multi-let 5.6 5.8 5.9 6.0 40 6.0 (5.1)Department Stores and Leisure 5.7 5.7 6.1 5.6 15 5.0 1.1
Superstores 5.8 5.8 5.8 5.2 3 5.1 (6.6)Solus and Other 6.5 6.7 6.7 5.8 20 4.6 (5.1)Retail 5.6 5.8 5.9 5.9 37 5.8 (4.8)Canada Water 3.3 3.3 3.3 4.0 11 4.0 (2.9)Total 4.5 4.8 4.9 5.1 17 5.3 (2.3)
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
82
Portfolio weightingAs at 30 September 2019 2018
%2019
%2019
£m
West End 31.9 34.7 4,066
City 15.8 20.2 2,373
Offices 47.7 54.9 6,439Regional 22.9 18.7 2,185
Local 17.2 17.0 1,995
Multi-let 40.1 35.7 4,180Department Stores and Leisure 4.2 2.6 301
Superstores 2.8 1.1 134
Solus and Other 1.9 1.5 175
Retail 49.0 40.9 4,790Residential1 1.0 1.2 147Canada Water 2.3 3.0 347Total 100.0 100.0 11,723Of which London 58% 65% 7,623
On a proportionally consolidated basis including the group's share of joint ventures and funds1 Standalone residential
83
Lease length and occupancyAs at 30 September 2019 Average Lease Length (yrs) Occupancy Rate (%)
To Expiry To Break EPRA Occupancy Occupancy1,2,3
West End 6.2 5.0 97.0 97.3
City 7.0 5.9 84.8 97.1
Offices 6.5 5.3 92.6 97.2Regional 6.9 5.6 95.4 96.1
Local 6.6 5.3 95.0 95.8
Multi-let 6.8 5.4 95.2 95.9Department Stores and Leisure 14.8 12.3 99.5 99.5
Superstores 9.2 9.1 100.0 100.0
Solus and Other 10.1 10.1 100.0 100.0
Retail 7.5 6.1 95.7 96.3Canada Water 5.2 5.1 99.7 99.9Total 7.0 5.8 94.3 96.8
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 96.8% to 97.3% 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 96.3% to 95.6%, and total occupancy would reduce from 96.8% to 96.4%
84
Annualised rent & estimated rental value (ERV)As at 30 September 2019 Annualised Rents
(Valuation Basis) £m1ERV
£mAverage Rent
(£psf)Group JVs & Funds Total Total Contracted2 ERV
West End3 141 - 141 183 60.8 67.4City3 7 57 64 104 50.5 58.7Offices3 148 57 205 287 57.0 64.0Regional 44 87 131 142 30.3 31.7Local 110 24 134 139 22.8 23.1Multi-let 154 111 265 281 26.0 26.7Department Stores and Leisure 18 - 18 16 15.0 13.3Superstores 4 4 8 7 22.3 19.8Solus and Other 13 - 13 9 20.5 14.7Retail 189 114 304 313 24.6 24.7Residential4 4 - 4 4 45.2 37.7Canada Water5 8 - 8 9 18.0 21.1Total 349 172 521 613 30.6 33.8
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
85
Rent subject to open market rent reviewFor the year to 31 March 2020 2021 2022 2023 2024 2020–22 2020–24
As at 30 September 2019 £m £m £m £m £m £m £m
West End 7 10 9 23 7 26 56
City 2 9 - - 15 11 26
Offices 9 19 9 23 22 37 82Regional 5 18 12 11 8 35 54
Local 5 12 6 17 5 23 45
Multi-let 10 30 18 28 13 58 99Department Stores and Leisure - - - - 2 - 2
Superstores 3 - - 2 1 3 6
Solus and Other - - - - - - -
Retail 13 30 18 30 16 61 107Residential - - 1 - - 1 1Canada Water1 - - - - - - -Total 22 49 28 53 38 99 190
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
86
Rent subject to lease break or expiry For the year to 31 March 2020 2021 2022 2023 2024 2020-22 2020-24
As at 30 September 2019 £m £m £m £m £m £m £m
West End 15 17 22 16 15 54 85
City 2 13 2 4 12 17 33
Offices 17 30 24 20 27 71 118Regional 11 12 13 18 20 36 74
Local 11 11 14 12 19 36 67
Multi-let 22 23 27 30 39 72 141Department Stores and Leisure - - 3 - - 3 3
Superstores - - - 2 - - 2
Solus and Other 1 - - - - 1 1
Retail 23 23 30 32 39 76 147Residential - 3 - - - 3 3 Canada Water1 - 1 - 1 2 1 4Total 40 57 54 53 68 151 272% of contracted rent 7.3 10.3 9.9 9.6 12.3 27.5 49.4
On a proportionally consolidated basis including the group's share of joint ventures and funds excluding committed, near term and assets held for development1 Reflects standing investment only
87
Contracted rental increases (cash flow basis) For the year to 31 March 2020 2021 2022 2023 2024 2020-22 2020-24
As at 30 September 2019 £m £m £m £m £m £m £m
Expiry of rent free periods 11 21 1 - - 33 33
Fixed uplifts (EPRA basis) - - 1 - - 1 1
Fixed & minimum uplifts - 1 1 - 1 2 3
Total 11 22 3 - 1 36 37
On a proportionally consolidated basis including the group's share of joint ventures and funds excluding committed, near term and assets held for development
88
Total Property Return (as calculated by IPD)6 months to 30 September 2019 Offices Retail Total% British Land IPD British Land IPD British Land IPD
Capital Return 0.5 0.2 (11.0) (5.3) (4.3) (1.3)
– ERV Growth 0.9 1.3 (4.8) (2.1) (2.3) 0.0
– Yield Movement1 0 bps 3 bps 37 bps 14 bps 17 bps 5 bps
Income Return 1.6 1.9 2.9 2.6 2.1 2.2
Total Property Return 2.1 2.1 (8.4) (2.8) (2.3) 0.8
1 Net equivalent yield movement
89
As at 30 September 2019
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 6.5
Total Completed in the Year 287 171 - 8.3 6.5
100 Liverpool Street Office 50 520 Q1 2020 317 55 19.2 14.9
135 Bishopsgate Office 50 335 Q1 2020 184 22 9.7 9.4
1 Triton Square3 Office 100 366 Q4 2020 340 77 22.7 21.8
Plymouth (Leisure) Retail 100 108 Q4 2019 33 6 3.1 2.1
Total Committed 1,329 874 159 54.7 48.2
Retail Capital Expenditure4 65
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 October 2019. 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
90
Near term development pipelineAs at 30 September 2019
Sector BLShare
Sq ft Expected 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 100 335 Q1 2020 83 243 23.0 - Consented
1 Broadgate Office 50 532 Q4 2020 91 204 19.0 - Consented
Aldgate Place, Phase 2 Residential 100 146 Q4 2020 37 86 6.0 - Consented
Total Near Term 1,013 211 533 48.0 -
Retail Capital Expenditure3 45
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 October 2019. 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
91
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 30 September 2019 Sector BL Share Sq ft Planning status
% '000
Medium term Pipeline
2-3 Finsbury Avenue Office 50 563 Consented
Gateway Building Leisure 100 105 Consented
5 Kingdom Street1 Office 100 429 Consented
Meadowhall (Leisure) Retail 50 333 Consented
Ealing – 10-40 The Broadway Retail 100 292 Pre-submission
Eden Walk Retail & Residential Mixed Use 50 533 Consented
Canada Water2 Mixed Use 100 5,000Resolution to grant
planning
Total Medium Term 7,255
92
Estimated future development spend and capitalised interest As at 30 September 2019 PC
Calendar Year
Cost to Come £m (excluding notional interest) – 6 months breakdown
Mar-20 Sept-20 Mar-21 Sept-21 Mar-22 Sept-22 Mar-23 Sept-23 Total1
100 Liverpool Street Q1 2020 33 20 2 - - - - - 55
135 Bishopsgate Q1 2020 22 - - - - - - - 22
1 Triton Square Q4 2020 41 16 20 - - - - - 77
Plymouth (Leisure) Q4 2019 6 - - - - - - - 6
Total Committed 102 36 22 - - - - - 159
Norton Folgate 2022 15 20 35 61 67 27 14 4 243
1–2 Broadgate 2024 10 10 10 17 26 31 32 28 204
Aldgate Place, Phase 2 2023 5 7 9 18 21 19 6 1 86
Total Near Term 30 37 54 96 114 78 52 33 533
Indicative Interest Capitalised on above at attributable rates 4 3 4 4 5 3 2 2
1 Includes costs to come post September 2023
93
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
Note: Forecast reflects CBRE’s estimate of earliest completions. Central London comprises the City, Docklands, Midtown, Southbank and West End areas.
Source: CBRE
m sq ft
5.2m4.4m
CompletedU/C Pre-letPipeline Pre-letU/C – SpeculativePotential Speculative10 year average new and under-construction take-up10 year average development completions
Q3 2019
94
West End development pipeline
Note: Forecast reflects CBRE’s estimate of earliest completions
0.0
0.5
1.0
1.5
2.0
2.5
3.0
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
1.1m
Source: CBRE
m sq ft
Q3 2019 CompletedU/C Pre-letPipeline Pre-letU/C – SpeculativePotential Speculative10 year average new and under-construction take-up10 year average development completions
95
City development pipeline
Note: Forecast reflects CBRE’s estimate of earliest completions
0.0
1.0
2.0
3.0
4.0
5.0
6.0
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
2.5m2.0m
m sq ft
Source: CBRE
Q3 2019 CompletedU/C Pre-letPipeline Pre-letU/C – SpeculativePotential Speculative10 year average new and under-construction take-up10 year average development completions
96
London office market rental outlook
£ psf
0
20
40
60
80
100
120
140
200019951990 20102005 20202015
Forecast
Source: CBRE (historic) and Average Agents' Consensus for forecasts
Actual
West End
City
Prime London Office Rents
97
0
2
4
6
8
10
12
14
16
18
20
1985 1990 1995 2000 2005 2010 2015 Q3 2019
Vacancy Central London
5.3%
3.4%
Source: CBRE (historic)
West End
West End 10 year average
City
City 10 year average
West End & City Vacancy Rates
98
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