WWW.BRITISHLAND.COM HALF YEAR RESULTS PRESENTATION HALF YEAR ENDED 30 SEPTEMBER 2013
RESULTS OVERVIEW Chris Grigg Chief Executive 1
INTRODUCTION • A strong set of results – Improving performance from Retail – Further step-up in O ffices’ performance • Successfully executing our plan – Investing our placing proceeds – Increasing our development pipeline 2
PERFORMANCE HIGHLIGHTS HY to 30 September % Change UK Valuation £11.2bn +2.8% Capital Returns vs IPD +100bps NAV per Share 623p +4.5% Dividend per Share 13.5p +2.3% 6 month Total Accounting Return 6.8% 3
MATERIAL IMPROVEMENT IN VALUATIONS UK Valuation Drivers £m TOTAL VALUATION MOVEMENT £22m £90m £309m 320 220 120 20 -80 H1 2012/13 H2 2012/13 H1 2013/14 Asset Management Development Yield Movement Total Valuation 4
STRONGER LETTING ACTIVITY • Investment lettings and renewals at 5.4% ahead of ERV Increased Letting Activity Future Annual Rent Added Sq ft 000’s £m 14.1 322 9.8 110 59 6.1 609 433 410 H1 2012/13 H2 2013/13 H1 2013/14 H1 2012/13 H2 2012/13 H1 2013/14 Investment Lettings Development Lettings Lettings/renewals and Rent Reviews 5
INVESTING IN LINE WITH STRATEGY ADDING FUTURE GROWTH TO THE PORTFOLIO Successfully • Proceeds fully deployed ahead of expectations 1 investing • Largest deal Paddington Central (£470m) placing • Expected to be accretive to earnings in current year proceeds Rebuilding • £1.1bn recently committed/near term development pipeline 2 our • Focused on London offices and residential development • Significant profit potential pipeline • Taking advantage of investment market strength to sell • Sale of mature UK retail assets 3 Accelerating asset sales • Proceeds reinvested in high quality locally dominant schemes • Sale of Puerto Venecia reduces European exposure to 1% 6
RETAIL 7
IMPROVING RETAIL PERFORMANCE • Strengthening capital returns (+1.5%) after 18 months of declines • Performance driven by yield compression and asset management • Continue to outperform IPD across all subsectors Capital Returns (%) H1 2012/13 H2 2012/13 H1 2013/14 Retail Parks (2.3) (0.8) 1.0 Superstores 0.5 (1.1) 2.1 Shopping Centres (0.3) (1.0) 0.3 Department Stores (0.6) 3.2 6.5 Leisure 0.0 (0.2) 2.0 UK Retail (1.0) (0.6) 1.5 8
CONTINUED RETAIL POLARISATION Retail ERV Growth Retail Occupancy Indexed March 2010 = 100 % 105 98.0 97.4 95.3 100 94.7 95 88.9 88.3 90 85 Mar Sep Mar Sep Mar Sep Mar Sep Mar 13 Sep 13 10 10 11 11 12 12 13 13 BL All Retail IPD All Retail IPD Secondary BL All Retail IPD All Retail IPD Secondary 9
STRONG RETAIL ASSET MANAGEMENT • Leasing activity significantly ahead Increased Lettings/Renewals of last half year Sq ft 000s • Lettings/renewals 3.8% ahead 721 of ERV • Administration down to 0.2% of total rent (from 0.9%) • Occupancy up 60bps to 98.0% 403 354 • Continue to outperform on footfall 271 224 150 29 97 Retail Parks Shopping Development Total Retail Centres H1 2012/13 H1 2013/14 10
BREADTH AND QUALITY OF OFFER IN RETAIL Homewares • Wren Kitchens at Colchester and Oxford • CSL at Stockton 125,000 sq ft • Next Home at Colchester • Harvey’s at Bradford, Wakefield and Oldham • Nike at Rotherham and Chester Fashion • Outfit at Stockton 248,000 sq ft • Schuh at Glasgow Fort • Fat Face at Drake Circus, Plymouth • JD Sports at Ealing • Costa at Bradford, Elgin, Lincoln Food & Leisure • Giraffe at Milton Keynes 75,000 sq ft • Wagamama at Whiteley • Ed’s Diner at Meadowhall • Cineworld at Whiteley 11
TAKING ADVANTAGE OF MARKET STRENGTH RECYCLING RETAIL ASSETS • Increase in pace of asset sales • £311m of retail assets sold to year to date; £243m sold last year • Over £80m of deals under offer; more than £100m in the market Retail Asset Sales (Year to Date) No of Assets Sale Price Retail Parks 3 £70m Foodstores 2 £15m Shopping Centres 2 £215m High Street 1 £11m Total 8 £311m 12
INVESTING IN THE RIGHT RETAIL LOCATIONS SOUTHGATE, BATH 50% acquired for £101m 430,000 sq ft Top 10 Bath as a UK Tourist Destination 18m Visitors pa 13
INVESTING IN THE RIGHT RETAIL LOCATIONS SOUTHGATE, BATH Modern retail formats Great brands Bought significantly below replacement cost Growth potential • Affordable rents • Improving the occupier mix • 5.7% yield when fully let 14
DEVELOPING IN THE RIGHT RETAIL LOCATIONS WHITELEY SHOPPING 320,000 sq ft scheme completed in May 7.8% yield on cost Nearly 2.5m shoppers since opening £90m estimated annual sales Highly affordable • Rents £25 - £45psf • Service charge: £3.50psf Planning for 60,000 sq ft leisure scheme 15
OFFICES AND RESIDENTIAL 16
ANOTHER STRONG OFFICE PERFORMANCE • Strong performance with capital returns of 5.4% • Capital returns driven by both standing investments, 3.4% and developments, 11.1% • Outperformed IPD across sector and subsectors Capital Returns (%) H1 2012/13 H2 2012/13 H1 2013/14 West End 3.6 6.2 6.9 City 1.5 1.4 3.8 BL Offices 2.3 3.4 5.4 Residential 4.8 3.1 3.6 BL Offices and Residential 2.4 3.3 5.4 17
BENEFITING FROM INCREASED WEST END EXPOSURE £2.7bn £4.5bn £5.5bn 41% 43% 64% 59% 57% 36% 36% MARCH 2010 SEP 2013 SEP 2013 (Reported) Including NDV of committed developments West End City 18
STRONG OFFICE ASSET MANAGEMENT • Step up in letting activity across Letting Activity by Sector investment and developments 3% 2% • 439,000 sq ft of lettings/extensions 7% – 9.5% ahead of ERV 8% TMT – Further 142,000 sq ft under offer 37% 12% • Occupancy at 94.7% reflecting completion and acquisitions Insurance Insurance – City occupancy – 97.0% 31% – West End occupancy – 92.8% TMT Insurance Corporate Other Financial Legal Oil & Gas 19
DELIVERING PERFORMANCE THROUGH DEVELOPMENTS • Completed 637,000 sq ft of London developments • 262,000 sq ft development pre-lets agreed/under offer 10-30 BROCK STREET 10 PORTMAN SQUARE CLARGES £20.1m ERV ; 88% pre-let £9.7m ERV; 51% pre-let 11% valuation uplift Profit on cost of over 60% Profit on cost of over 50% Start on site Dec 2013 OBTAINED PLANNING COMPLETED COMPLETED 20
CREATING OUTSTANDING SPACES – REGENT’S PLACE 10-30 Brock Street Completion another significant milestone 10 Brock Street 100% let 3 months after completion Manchester City FC Secures additional £18m of rent for 16 years 21
DELIVERING RENTAL GROWTH – REGENT’S PLACE 2010/11 2011/12 2009/10 2012/13 2013/14 10/20 Triton St 20 Triton St 10/30 Brock Street Debenhams £ Manchester City FC PSF 70psf 70 65 60 55 50 45 42.50psf 22
DELIVERING STRONG RETURNS FROM 2010 OFFICE DEVELOPMENT PROGRAMME • Profit on cost over 40%; IRRs of c30% £m £490m £423m 90 £391m £359m 126 £321m 175 £257m 192 188 400 192 297 216 167 133 65 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Profit Taken Profit to Come 23
PADDINGTON CENTRAL Acquired for £470m Fully let yield of 6.2% Significant opportunity to create value from asset management and development Third of vacant office space already let at terms ahead of ERV on acquisition 24
SHOREDITCH ESTATE – EAST LONDON S W Broadgate E N Shoreditch Estate 25
REPLENISHING OUR DEVELOPMENT PIPELINE • 2.1m sq ft next phase London and retail development (recently committed and near-term) • £1.1bn total development cost • Estimated profit to come of around £275m Clarges The Aldgate Yalding 4 Kingdom Shoreditch 5 Kingdom Estate Hempel Phase 1 House Street Estate Street RECENTLY COMMITTED NEAR-TERM PIPELINE Start on site 2013 2014 2015 1,044,000 sq ft 458,000 sq ft 562,000 sq ft 26
FINANCIAL REVIEW Lucinda Bell Finance Director 27
HIGHLIGHTS HY to 30 September H1 2013 H1 2014 Change Underlying Profit before Tax (£m) 137 146 +6.6% Underlying Earnings per Share (p) 15.2 14.5 (4.6%) Dividend per Share (p) 13.2 13.5 +2.3% Net Asset Value per Share (p) 596 623 +4.5% Valuation Performance 0.2% 2.8% Total Accounting Return 2.4% 6.8% 28
NET RENTAL INCOME MOVEMENT £m 3 3 13 (1) (15) Like for like Retail 1.5% 275 272 Offices 0.4% Total 1.2% H1 2013 PY Acquisitions/ Placing Developments Like for Like Other H1 2014 Disposals Investment 29
FINANCING COSTS £m 6 1 2 (3) 104 98 H1 2013 Ropemaker Sale Equity Placing Equity Proceeds Other H1 2014 Proceeds Investment 30
INCOME STATEMENT HY to 30 September H1 2012/13 H1 2013/14 Change Net Rental Income (£m) 272 275 1.1% Fees & Other Income (£m) 8 7 Administrative Expenses (£m) (39) (38) Net Finance Costs (£m) (104) (98) Underlying PBT (£m) 137 146 +6.6% Underlying EPS (p) 15.2p 14.5p (4.6)% 31
DEPLOYING OUR PLACING PROCEEDS • £790m acquisition spend including £100m of development opportunities • NIY of 5.7% on £690m of income producing investments • £230m of prospective development spend • Earnings neutral in H1; 0.5p accretive in FY14 Prospective Acquisition Spend Development Spend £m £m Paddington Central 470 180 Ealing Broadway Shopping Centre 143 - Surrey Quays JV buy-out 48 24 Other Acquisitions 126 26 Investments 787 230 32
Recommend
More recommend
