2017 HA 2017 HALF Y YEAR R RESULT LTS 25 JULY 2017
Strong financial results and robust balance sheet Driving performance through operational excellence and disciplined capital allocation High quality pipeline of growth opportunities Optim imis istic ic o outlo look B+S, Frankfurt 2
Strong financial results and robust balance sheet Driving performance through operational excellence and disciplined capital allocation High quality pipeline of growth opportunities Optim imis istic ic o outlo look B+S, Frankfurt 3
Strong financial results and robust balance sheet Adjusted Strong earnings growth +23% 23% pre-tax profit – Benefits of APP acquisition Adjusted EPS, +3. 3.2% 2% 9.7p – Asset management gains capturing rent reversion Like-for-like net rental – Development completions +3. 3.9% 9% income growth Robust balance sheet EPRA NAV per share +5. 5.4% 4% 504p – 4.9% portfolio value growth – £1.1 billion of financing, including rights issue and Loan to Value ratio 29% 29% (FY 2016: 33%) inaugural US private placement Dividend per share 2017 interim dividend increased by 5% 5. 5.25p 25p (2016: 5.0p) 4
3.9% growth in like-for-like net rental income Proportionally consolidated net rental income (excluding joint venture fees 1 ), H1 2016-17, £ million £8.6m £4.1m £130.7m £4.4m £120.9m £10.6m £(0.8)m £(5.9)m JVs at JVs at £(11.2)m share share £32.3m £27.3m APP acquisition Mainly 2016 disposals Group: up: +3. 3.9% 9% and disposals to part-fund UK: +5.9% APP acquisition CE: 0.0% Group Group £88.6m £103.4m Vacancy stable at 5.5% H1 2016 net Disposals Acquisitions Like-for-like Completed Space taken Other (incl Currency H1 2017 net rental income net rental developments back for surrender translation rental income income development premiums) 5
23% increase in Adjusted PBT Adjusted income statement APP performance fee generated non- H1 2017 1 2017 H1 2016 1 2016 • recurring profit of £3.2m £m £m FY 2017 JV fee income expected to • be c£24m Gross rental income 127.3 110.7 On-going JV fee income c£16m pa Property operating expenses (23.9) (22.1) • Net r rent ntal i inc ncome 103.4 103. 88.6 88. H1 2017 adjusted EPS based on • Share of joint ventures’ adjusted profit 1 22.1 25.5 average 934m shares FY adjusted EPS expected to be Joint venture fee income 16.5 9.1 • based on c966m shares (before Administration expenses (17.5) (15.5) impact of scrip dividend) Adj djus usted o d ope perating ng pr profit 124. 124.5 107. 107.7 Cost ratio of 22.9% • Net finance costs (33.3) (33.5) (H1 2016: 23.2%) Adj djus usted pr d profit be before tax 91. 91.2 74.2 74. 20.4% excl share based payments • (H1 2016: 21.5%) Tax on adjusted profit 0.7% 1.1% 1 Net property rental income less administrative expenses, net interest expenses and taxation 6
5.4% increase in EPRA NAV Components of EPRA net asset value change, 31 December 2016 to 30 June 2017 2p 33p (8)p 504p 10p (11)p 478p (after applying bonus adjustment factor of 1.046 to reported 500p) 31 December H1 2017 2016 Realised and Exchange rate and Net impact of 30 June 2017 2016 Adjusted EPS Final Dividend unrealised gains other financing activity 7
£1.1bn of new financing raised to strengthen balance sheet further £216m cash consideration for APP Rights I Issue LTV ratio and average cost of debt (incl share of JVs, 2012-H1 2017) £557m net proceeds 60% 5.0% 166m new shares £341m for future development capex 1.046 bonus adjustment factor 4.0% Average cost of debt 75% allocated to identified projects • 40% LTV ratio 3.0% 2.0% 20% Repay £200m 2018 bonds early 1.0% Priv ivate P e Pla lacem emen ent Issue 5.5% coupon bonds repaid in June • 0.0% 0% 2012 2013 2014 2015 2016 H1 17 €650m of new debt LTV ratio Ave cost of debt 11yr average duration Repay £320m APP secured debt 1.9% average coupon To be drawn in August 2017 2.5% average cost, repaid in July • 8
Robust financial position Balance sheet and gearing metrics (look-through basis), 31 December 2016 – 30 June 2017 £644m of cash and available facilities Including joint ventures at share 30 J 30 June 2017 2017 31 D 31 December 2016 2016 Attractive marginal cost of Group Weighted average cost of debt 1 (%) 3.1 2 3.4 bank borrowings of c1.4% (UK) and 1.1% (CE) 3 Average maturity of debt (years) 7.8 2 6.2 Fixed rate debt as proportion of net debt (%) 70 80 Net borrowings (£m) 2,086 2,091 LTV ratio (%) 29 33 H1 2017: £215m capex on development and infrastructure FY 2017: £350m+ estimated development capex (and further c£50m of infrastructure capex) 1 Based on gross debt, excluding commitment fees and amortised costs 2 Pro forma for repayment of APP secured debt and drawing of US private placement debt 3 Marginal borrowing costs after commitment fee 9
Strong financial results and robust balance sheet Strong earnings growth Robust balance sheet 2017 interim dividend increased by 5% Geodis, Paris 10
Strong financial results and robust balance sheet Driving performance through operational excellence and disciplined capital allocation High quality pipeline of growth opportunities Optim imis istic ic o outlo look B+S, Frankfurt 11
Favourable market conditions Economic growth outlook is supportive UK logistics supply continues to fall short of demand (GDP average annual growth rates 2013-18; source: OECD) (UK logistics take up and average availability; source: JLL) 3.0 2.5 3.4% 3.4% Take-up for H2 4.0% Take-up / availability, No. of years’ supply 2016 and H1 2.4% 2.0 2017 2.0% 3.0% 2.0 1.6% 1.5 m sq m 1.4% 1.3% 1.0% 2.0% 0.9% 1.0 0.6% 1.0 0.5 1.0% 0.0 0.0 0.0% 2011 2012 2013 2014 2015 2016 1H17 Poland Germany France UK Italy Historic (2013-16) Forecast (2017-18) Average availability Take-up No. of years' supply Online sales continue to gain market share Supply of speculative development remains low (Online purchases as share of total retail sales; source: Centre for Retail Research) (Speculative UK big box warehouse completions; source: JLL) 1.4 UK Completions, m sq m 1.2 Germany 1.0 France 0.8 Europe ave 0.6 Poland 0.4 Italy 0.2 0.0 0.0% 5.0% 10.0% 15.0% 20.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 In dvpt 2017 2016 2015 12
Driving performance: operational excellence and disciplined capital allocation Leasing ng and A nd Asset Mana nage gement nt Dev evel elopmen ents Completed development £28m contracted headline rent, 79,000 sq m new space completed: • • +28% from H1 2016 £5m of potential rent, 91% secured 15% uplift on UK rent reviews £18m new pre-lets signed; £3m • • and renewals potential from new speculative Amazon, Munich development starts Low vacancy rate of 5.5%, 92% • Acquired customer retention 920,000 sq m under construction • Acqui quisitions ns Dis Disposals als £207m of asset disposals £550m of asset acquisitions • • Part consideration for APP £150m 50% interest in APP portfolio APP portfolio Non-strategic German light industrial Ave topped-up NIY of 4.2% (5.2% £47m excl Cargo Area) Sold Former Northfields industrial estate • £34m of land acquisitions sold to residential developer • Primarily land for immediate development in Germany, Italy and Average yield of 4.4% (3.1% incl • Spain land) Nelson Trade Park 13
Portfolio value change driven by improving yields and asset management 1 UK UK +5. 5.5% 5% £400m Slough Trading Estate +7.1% Cont ntine nent ntal E Eur urope pe +2. 2.3% 3% +4.6% £350m Park Royal +8.8% SELP +1.1% Heathrow +3.0% SEGRO wholly-owned +4.1% £300m UK big box logistics 2 +1.9% £250m £200m +5.7% £150m +5.2% +3.7% £100m £50m 2.3% +0.1% £0m Total Greater London Thames Valley & Northern Europe Southern Europe Central Europe National Logistics 0.9% 0. 9% 0. 0.9% 9% 0. 0.6% 6% 0.6% 0. 6% 0. 0.0% 0% ERV gr growth 0.8% 0. 8% UK: 0. 0.9% 9% Cont ntine nent ntal Eur urope pe: 0 0.4% 1 Percentage change relates to completed properties, including JVs at share. 2 Includes big box warehouses part of the Greater London portfolio 14
Strong financial results and robust balance sheet Driving performance through operational excellence and disciplined capital allocation High quality pipeline of growth opportunities Optim imis istic ic o outlo look B+S, Frankfurt 15
High quality pipeline of growth opportunities Income growth potential through active asset management of existing portfolio Significant growth from current development pipeline Optionality over future development through land bank and options Azymut, Strykow 16
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