FULL YEAR RESULTS TO MARCH 2015 2 nd June 2015 - PowerPoint PPT Presentation

FULL YEAR RESULTS TO MARCH 2015 2 nd June 2015 www.londonmetric.com

AGENDA Highlights • • Strategy Financial • Investment • • Asset Management • Outlook Questions • 2

HIGHLIGHTS Andrew Jones

FINANCIAL HIGHLIGHTS 31 March 31 March Change 2015 2014 Reported Profit £159.5m £125.3m +27% Valuation Movement £118.4m £95.9m +23% EPRA NAV per share 141p 121p +16% T otal Accounting Return 21.7% 16.5% +520 bps EPRA Earnings per share 6.6p 4.2p +57% Dividend per share 7.0p 7.0p - Special Dividend per share 2.0p n/a - 4

KEY PORTFOLIO HIGHLIGHTS 31March 31 March Change 2015 2014 Portfolio Valuation £1,400.4m +15%¹ £1,219.8m Contracted Rental Income £85.6m +9.7% £78.0m EPRA T opped Up NIY 5.8% 65 bps 6.4% Like for like income growth 2.9% -0.5% 3.4% Occupancy 99.7% +0.1% 99.6% WAULT (years to expiry) 13.1 +0.4 years 12.7 T otal Property Return 17.5% +50 bps 17.0% ¹ like for like valuation movement 9.2% 5

OPERA TIONAL HIGHLIGHTS £309m acquisitions – NIY 6.2% 100bps NIY arbitrage £598m £289m disposals – NIY 5.2% Investment £51.0m profit on cost Activity £29m capital profit on Carter Lane - driving special dividend • 2.6m sq ft – 12.4% above previous passing rent; 6.6% above ERV 50 Asset Management Income growth of £2.6m pa transactions Like for like income growth of 2.9% 2.0m sq ft of committed developments 3.1m sq ft of Primark, Islip – PC in September 15 • development HUT, Warrington – PC in October 15 • 1.1m sq ft of pipeline - planning submission imminent at Bedford for 750,000 sq ft Increased operational flexibility with new £400m unsecured facility Cost of borrowing reduced by 50 bps to 3.4% • Effectively Financed Debt maturity increased to 6.2 years • Loan to Value 36% 6

STRATEGY REVIEW Andrew Jones

OUR CORE SECTORS Focussed on winning sectors meeting occupiers’ needs March 2015 Portfolio valuation: £656.9m 5% 5% Total return: +20.0% 6% 1 Distribution NIY: 5.4%¹ 40% 9% Ave rent £5.40 psf £1,400m Occupancy: 100%, WAULT: 12.9 years Portfolio valuation: £523.5m Total return: +17.6% 35% 2 Retail NIY: 6.0%¹ Ave rent £16.50 psf Occupancy: 98.5%, WAULT: 12.3 years DISTRIBUTION RETAIL DEVELOPMENT RESIDENTIAL LEISURE OFFICE ¹ EPRA Topped Up Yield 8

INVESTMENT STRA TEGY Asset Short-cycle Income management development Strong and sustainable Grow, strengthen and Refurbish, redevelop lengthen income and extend Kirkstall, Leeds Southampton Leicester Retail Occupier led Primark, Islip Dagenham Newark Distribution Opportunistic Odeon Core Stretch 1 1. Core stretch assets will have strong real estate fundamentals, good income characteristics & high occupier contentment in sectors where we have expertise 9

FINANCIAL REVIEW Martin McGann

INCOME ST A TEMENT 31 March 31 March % Change 2015 2014 Reported Profit £159.5m £125.3m +27.3% Net rental income £57.6m £51.3m +12.3% Share of joint venture income £9.0m £3.1m +190% Management fees £2.2m £0.8m +175% Administrative costs £(12.5)m £(13.5)m -7.4% Finance costs £(15.4)m £(15.4)m - Other - £0.1m - EPRA earnings £40.9m £26.4m +55% EPRA EPS 6.6p 4.2p +57% DPS 7.0p 7.0p - Special Dividend 2.0p - - 11

DELIVERING INCOME GROWTH (£m) 100.0 3.6 Development Activity 90.0 1.2 13.4 4.5 2.5 1.8 9.8 80.0 5.3 14.8 13.5 70.0 90.5 84.4 84.4 77.1 60.0 75.8 72.7 66.3 50.0 40.0 PPE net Mar 14 Net occupier Mar 15 Activity in June 15 Disposals Acquisitions Annualised investment contracted transactions & Contracted legals Run Rate rent roll new space net income 12

BALANCE SHEET Statutory 31 March 31 March 2015 2014 Property portfolio £1,164.1m £1,030.6m Joint ventures £148.4m £109.0m Cash £50.6m £78.4m Bank debt (£465.5m) (£415.5m) Other net liabilities (£27.4m) (£46.6m) Net Assets £870.2m £755.9m EPRA Adjustments £7.0m £1.1m EPRA Net assets¹ £877.2m £757.0m EPRA NAV per share 141p 121p 1. Excludes fair value of derivatives 13

MOVEMENTS IN EPRA NAV NAV per share (p) Management Activity 144.0 140.0 6.7 136.0 132.0 12.3 140.6 128.0 6.6 124.0 7.0 1.0 120.0 121.6 121.0 120.6 116.0 EPRA EPRA NAV EPRA NAV Dividend Revaluation Other Earnings Mar-15 Mar-14 14

DEBT METRICS Financing Effectively • Bank debt of £465.5m (£563.0m incl JVs¹) • New £400m² unsecured RCF - replaced five secured debt facilities of £269.3m • New 7 year £196m secured Helaba facility • New 5 year JV facilities with PBB and M&G • Average interest rate today of 3.4% vs 3.9% in March 2014 - 80% hedged • Average maturity increased 2.5 years to 6.2 years • Net gearing 36% vs 32% in March 2014 ¹ LMP share ²£100m additional flexibility 15

INVESTMENT REVIEW Valentine Beresford

INVESTMENT ACTIVITY SUMMARY Number of £m¹ NIY WAULT transactions Acquisitions 20 £309m 6.2% 14.8 yrs Retail 14 £100m 6.3% 13.6 yrs Distribution 6 £209m 6.1% 15.3 yrs Disposals 16 £289m 5.2% 13.7 yrs Retail 10 £106m 6.2% Non Core (Office & residential) 6 £183m 3.4% T otal Activity 36 £598m + 100 bps +1.1 yrs Post Period End Activity² 8 £57m ¹ LM Share ² PPE Activity – 4 Acquisition £16.0m (5.8%); 3 Disposals £41m (5.0%) 17

RECYCLING CAPIT AL Recycling out of mature assets Retail Park Sales Distribution Sales 11 disposals - £112.9m¹, NIY 6.1% 2 disposals - £33.0m¹, NIY 5.0% Asset management plans completed Fully executed asset management plan Redevelopment of Bishop Auckland Brackmills Travis Perkin’s lease extended from 3 months to 10 years 20 leasing initiatives undertaken Harlow 9 year lease surrendered and relet on Profit on cost £16.4m (18.4%) 25 year lease to Brake Brothers Profit on cost £8.3m (34.1%) Bishop Auckland Londonderry Lichfield Harlow Brackmills £37.2m 4.7% NIY £23.85m 5.3% NIY £18.0m 7.3% NIY £13.3m 5.5% NIY £14.4m 5.5% NIY Sold Nov 2014 Sold March 15 Sold Apr 2015 (PPE) Sold Apr15 (PPE) Sold Apr 15 (PPE) £18.6m at Share £9.0m at Share £6.7m at Share ¹ Including post period end 18

ACQUISITION ACTIVITY Focussed on Distribution Acquisitions Dixons Carphone, Newark Newark Acquired Sept 2014 £68.5m (NIY 6.4%) £4.5m rental income; WAULT 18.8 years Tesco dark store, Croydon Croydon Acquired Dec 2014 £21.1m (NIY 5.5%) £1.2m rental income; WAULT 5.8 years 10 convenience led retail assets – incl post period end Retail £49.7m (NIY 6.0%) 70% let to M&S Simply Food and Aldi £3.1m rental income; WAULT 15.9 years 19

CASE STUDY: DAGENHAM Dagenham – A13 Eddie Stobart Logistics, Dagenham Acquired Jan 2015 £56.5m (NIY 5.1%) £3.0m rental income; WAULT 16.5 years Asset management opportunity to work in partnership with occupier Strategically located adjacent to A13 and HS1 railway line Railway line A13 c.£15m identified capital expenditure Delivering c.7% yield on cost Anticipated delivery 2017 20

ASSET MANAGEMENT REVIEW Mark Stirling

ASSET MANAGEMENT ACTIVITY % above Area % above LFL rental WAULT No. Uplift (£m) previous (000 Sq Ft) ERV growth (Years) rent New Lettings & Regears 30 500 £2.0m 14.6% 15.2% 1.9% 16.2 Rent Reviews 20 2,133 £0.6m 4.2% 3.2% 1.0% - FY T otal 50 2,634 £2.6m 6.6% 12.4% 2.9% Asset management activity delivered 10% income return on capital expenditure¹ ¹ £10.9m asset management capital expenditure 22

PROPERTY PERFORMANCE T otal Return Income Return Capital Return FY to March 15 LM IPD LM IPD LM IPD Distribution 20.0 21.4 6.0 5.7 13.2 14.9 Retail 17.6 13.5 6.3 5.3 10.7 7.8 Core Portfolio 18.8 16.6 6.2 5.6 11.9 10.6 All Property 17.5 17.1 5.8 5.1 11.1 11.5 ERV growth 3.5% v IPD 3.2% • WAULT 13.1 years v IPD 11.3 years¹ • 35% of capital return through management activity • ¹ WAULT incl breaks 12.3 years v IPD 10.5 years 23

CASE STUDY: WORKING IN PARTNERSHIP Convenience Sector 5 investment deals on 65,600 sq ft plus asset mgmt initiative 4 let on 20 year, contracted uplifts M&S Total income of £1.3m; WAULT 19.0 years Yield on cost of 6.3%¹ Two further deals in legal's 6 deals over the year on 97,600 sq ft Let on 20 year, RPI linked leases £1.5m rental income; WAULT 18.9 years Aldi Yield on cost of 5.6% A further deal in legal's ¹ Includes asset management initiative at Tonbridge 24

COMMITTED DEVELOPMENT £112m capital expenditure delivering 7.1% yield on cost Islip Distribution Centre – 1,062,000 sq ft 100% pre let to Primark Acquired yield on cost: 6.8% Islip Rent £5.3m pa on 25 year lease with 1.5% annual uplifts Construction on site - completion September 2015 Omega, Warrington – 690,000 sq ft 100% pre let to The Hut Group Warrington Funding yield: 7.5% Rent £3.8m pa on 15 year lease Construction on site – completion October 2015 25